ORAL ANSWERS TO QUESTIONS

NORTHERN IRELAND

The Secretary of State was asked—

Police Service of Northern Ireland

Pat Glass: What discussions she has had with Ministers in the Northern Ireland Executive on ensuring the Police Service of Northern Ireland is adequately resourced.

Theresa Villiers: May I first convey to the House the apologies of the Northern Ireland Minister who is chairing cross-party talks in Stormont today?
	It is for the Executive to ensure that the PSNI is properly resourced, and the Government have provided significant additional funding to tackle terrorism, totalling £231 million. We are now working with the PSNI to understand the impact that funding reductions imposed by the Northern Ireland Executive will have on its ability to police the terrorist threat.

Pat Glass: The Police Service of Northern Ireland is experiencing budgetary shortfalls that the Chief Constable has said will leave it “unrecognisable”, and “put lives at risk.” What is the Secretary of State doing to ensure that budget cuts to the PSNI do not undermine the peace process or put lives at risk?

Theresa Villiers: This is a very serious matter, and as the hon. Lady has said, the Chief Constable is concerned about the extent of the reductions proposed. A real concern is that a number of the cuts are in-year cuts, which makes achieving them through efficiency reforms very difficult. The Government will continue to support the PSNI with substantial extra security funding, but the Chief Constable now believes that the reductions proposed by the Executive will impact on his ability to police terrorism. We are working closely with him to ascertain exactly what that impact will be, and to see what steps can be taken to mitigate it.

Andrew Robathan: I pay tribute to the PSNI, which does a marvellous job in very difficult circumstances. Will my right hon. Friend consider whether it would be assisted by the National Crime Agency operating in Northern
	Ireland, and in particular by tackling the gangs that are still operating down in South Armagh—the same gangs that used to shoot and murder British soldiers, and that are still trying to murder police officers? They should be brought to book by the NCA.

Theresa Villiers: I agree with my right hon. Friend in paying tribute to the PSNI, and allowing the NCA to operate with its full remit in Northern Ireland is essential if we are to combat organised crime effectively. This matter does impact on PSNI funding, because its inability to receive the full support of the NCA and having to do the work that the NCA would otherwise do for it places additional pressures on the PSNI.

Ivan Lewis: The Secretary of State will be aware that due to budget cuts the PSNI has effectively ceased all investigations into historical crimes associated with the troubles. Does she accept that that places a greater responsibility on all political parties to agree new mechanisms to deal with the past that put the needs of victims and their families first?

Theresa Villiers: It is very important that political parties in Northern Ireland find a way to agree a fresh approach to the past, and that is one reason why cross-party talks have been convened. We need to listen to the needs of victims, and we must also understand the increasing pressure on the PSNI and the criminal justice system. I believe it is important that we find a way forward on that, not least to relieve pressure on the PSNI so that it can concentrate on the important policing needs of today.

Laurence Robertson: Will the Secretary of State confirm that she will be having discussions with the Executive about Operation Red Field?

Theresa Villiers: I have regular discussions with the PSNI on the question of on-the-runs and Operation Red Field, and I will do so again. It is crucial that the Executive parties reach an agreement on the budget for next year, and that they take into account the crucial importance of appropriate resourcing for the PSNI, and of course the cost of policing the past.

Nigel Dodds: The PSNI certainly needs to have adequate resources, not least to ensure that there are full and proper investigations into the continuing scandals involving Gerry Adams and Sinn Fein in relation to cases of sexual abuse, paedophilia, cover up, and the exiling of people from Northern Ireland to the Irish Republic. Does the Secretary of State agree that no amount of waffle or self-serving platitudes from Gerry Adams or the Sinn Fein leadership can distract or take away from the awfulness of those crimes, and the need for them to be brought fully to light?

Theresa Villiers: Any abuse or sex crime is appalling, and I entirely share the right hon. Gentleman’s concerns about the allegations made by Mairia Cahill. It is genuinely a very shocking, disturbing and distressing case, and all such crimes, whether the acts themselves or any purported cover-up, need to be fully investigated by the police. An independent review is set to take place into the way the original case around the allegations made by Mairia Cahill was handled.

Nigel Dodds: I am grateful to the Secretary of State for her reply and for her reference to the independent investigation by Keir Starmer into Mairia Cahill’s allegations. However, does she understand the concern and anger of people right across the community in Northern Ireland in relation to the allegations against Gerry Adams about the cover-up of the sexual abuse by his brother and his refusal to go to the police or to alert people about what was going on within Sinn Fein and the republican movement, putting other children and young people at risk? We still have not had the publication of the report by the Public Prosecution Service or the police ombudsman. Does she accept that there can be no whitewash of the black sins of Sinn Fein in relation to sexual abuse and paedophilia?

Theresa Villiers: These are indeed shocking crimes and shocking allegations. I certainly would urge Sinn Fein to answer all the questions that have been put to them about this very disturbing case.

Gerald Howarth: Does my right hon. Friend accept that it is quite intolerable for my constituents in Aldershot who served with the Parachute Regiment in Northern Ireland to read in the newspapers that, because of lack of resources in the PSNI, so-called historic crimes will no longer be investigated or are in doubt? It is grossly unfair to my constituents, who have served this country to the best of their ability to try to keep the peace between the warring parties, still to be living with the threat, nearly 60 years on, of prosecution.

Theresa Villiers: I agree with my hon. Friend that there are many people who will suffer as a result of the announcements in recent days in relation to delays in legacy matters and criminal justice in Northern Ireland. That is an important reason to press ahead with a fresh approach on the past, to be agreed through the cross-party talks, but it is also a crucial reason for the Executive to agree a budget and to make sure that they give appropriate priority to the need for police resources when they reach that agreement.

Mr Speaker: May I just gently point out to the House that we have a lot of questions to get through and we need to speed up?

Parades: Disputes Panel

David Simpson: What the geographical remit will be of the recently announced panel to discuss parading disputes in Northern Ireland.

Theresa Villiers: The proposal I announced on 7 October relates to disputed parades in the Twaddell and Ardoyne area of north Belfast, responding to the call by the Parades Commission for a wider, more structured process to address the issues around parades in the area.

David Simpson: I thank the Secretary of State for that clarification, but does she agree that resolution also needs to be found to the dispute in Drumcree in my constituency, which has been ongoing for the past 16 years?

Theresa Villiers: I recognise the grave disappointment that the hon. Gentleman and many in the Unionist and loyalist community feel about the situation in relation to that parade. It is important for all sides, wherever there is a dispute about a parade, to engage in a local dialogue to try to take things forward. In many parts of Northern Ireland that has proved successful in taking the tension out of parading and reaching an agreement with local residents affected.

Peter Hain: On parading, does the Secretary of State agree that the current political paralysis in Northern Ireland is undermining already shaky local faith in its elected politicians? Although I wish the Secretary of State well, I do not believe that the Prime Minister has been engaging closely or energetically enough with the parties to ensure that the 2007 settlement remains in good faith. I make no party point on this: from experience, I know that Northern Ireland needs constant care and attention from No. 10 and I hope it will now get that.

Theresa Villiers: I assure the right hon. Gentleman that Northern Ireland does get constant care and attention from the Prime Minister, not just with his decision to bring the G8 to Northern Ireland, but everyday in focusing on the security situation and repairing the Northern Ireland economy and, of course, by closely following these talks. I agree that it is vital that we do not let disputes about parades, painful though they are, get in the way of the need to reach resolution on important issues such as the budget, flags and reform of parading decisions.

Economy

Stephen Mosley: What steps the Government are taking to strengthen the Northern Ireland economy.

Neil Carmichael: What steps she is taking to promote economic growth in Northern Ireland.

Theresa Villiers: The Government’s long-term economic plan is working for Northern Ireland. Unemployment is falling and economic activity is increasing. We continue to work with the Executive on our shared objective to rebalance the Northern Ireland economy.

Stephen Mosley: The Northern Ireland science park recently published figures showing that the knowledge economy in Northern Ireland grew by 33% over the past five years, which is better than pretty much every other region in the UK. What action is my right hon. Friend taking to ensure that science and technology play a massive role in the future of the Northern Ireland economy?

Theresa Villiers: The economic pact signed between the Government and the Executive contained an important programme to support aerospace research with Bombardier and to promote Northern Ireland’s economic activity in the aerospace and space sector. That work is going well and will continue.

Neil Carmichael: News that the economy in Northern Ireland is growing is extremely welcome, especially with the increase in employment, but one potential drag on it might be the shortage of HGV drivers. What steps is my right hon. Friend taking to encourage young people to take up training opportunities to become such drivers?

Theresa Villiers: These are matters for the Northern Ireland Executive, but the UK Government recognise the crucial importance of the haulage industry, which is one of the reasons why we have frozen fuel duty, which is saving the haulage industry millions of pounds every year.

Mark Durkan: The Government cite city deals as a way to support the economy in the cities and regions on this island. If the Executive put forward a proposition for a city deal for Derry, would the Secretary of State work with the Treasury and other colleagues to support and deliver that deal as a way of implementing a lot of the key targets of the One Plan?

Theresa Villiers: The economic pact between the Executive and the Government was modelled on some of the approaches we take with city deals, but I would be delighted to talk to the hon. Gentleman about any proposals he might have to replicate the city deal model for Derry/Londonderry.

Ivan Lewis: The Secretary of State will agree that the current political paralysis has a corrosive impact on business confidence and therefore the Northern Ireland economy. Can she clarify whether the all-party talks she is chairing are dealing with all issues simultaneously that are causing the stalemate or focusing exclusively on the budget crisis?

Theresa Villiers: The talks are dealing with a long list of issues. We have taken them day by day—we did the budget, then we moved on to the legacy issues of flags, parades and the past. We will be looking at institutional questions today, and there are also proposals to look at unfinished businesses from the Belfast agreement. All these issues are important, but most crucial is that the budget is agreed, so that it is no longer causing instability in the Northern Ireland institutions.

Ivan Lewis: Economic inactivity and worklessness are major underlying causes of instability and insecurity in Northern Ireland. Will the Secretary of State therefore undertake to ensure that the Northern Ireland Office gives its full support to the Heenan-Anderson commission, which we have established with a brief to come up with proposals for how the UK Government and Northern Ireland Executive can tackle the problems of worklessness in a more effective way?

Theresa Villiers: I am certainly prepared to look at whatever findings that body comes up with. I was slightly surprised to see that Deirdre Heenan had tweeted that Labour did not have any policies, which I thought was quite an unusual start to the commission’s work. It is important to recognise that in this country we have had the largest annual fall in unemployment since records began. In Northern Ireland, the claimant count has fallen for 21 consecutive months. That is providing
	more peace of mind and security for thousands of people in Northern Ireland and it is the result of the Government’s long-term economic plan.

Youth Unemployment

Chris Evans: What steps she is taking to tackle youth unemployment in Northern Ireland.

Theresa Villiers: The October labour market survey reports that the unemployment rate in Northern Ireland for 18 to 24-year-olds has come down 4.2 percentage points over the year. The Government’s policy of reducing the largest structural deficit in UK peacetime history is delivering a sustainable economic recovery and assisting young people into employment.

Chris Evans: As the Secretary of State will know, youth unemployment is still stubbornly high in Northern Ireland. Jobs Growth Wales has created 12,000 opportunities for young people living in Wales. Has she had the chance to study the programme with the Executive, with the hope of adopting it?

Theresa Villiers: The Government are working hard to support a balanced economic recovery right across the United Kingdom. We welcome the fact that the UK economy is now growing faster than any major developed economy and that we have seen record falls in unemployment. We will continue to work hard on reducing the deficit, keeping mortgage rates low and reducing business taxes to encourage employers to take on more people in the workplace, particularly young people.

William Bain: PricewaterhouseCoopers has noted that unemployment in Northern Ireland is falling at half the rate of the rest of the United Kingdom. Will the Secretary of State discuss with the Northern Ireland Executive some specific proposals, such as Labour’s plan for a one-year national insurance tax break for all small firms that take on new workers? Would that not help to promote employment in Northern Ireland and the rest of the UK?

Theresa Villiers: We are doing better than that. We are actually cutting national insurance contributions for employers across the whole of the United Kingdom. As from April, employers in Northern Ireland—just as in the rest of the UK—will not pay any national insurance contributions at all on the people they employ who are under 21. That is real action, helping young people in Northern Ireland into jobs.

Gregory Campbell: Young people in Northern Ireland can be exploited rather than given employment opportunities. Tomorrow night in Londonderry an event is scheduled to mark the 40th anniversary of a young man of 16, having been recruited to the IRA, killing himself in a bomb explosion. Does the Secretary of State agree with me that Sinn Fein representatives in Northern Ireland should be helping to create employment opportunities for young people rather than trying to rewrite history about a small
	number of young people being given instructions to carry out bomb attacks who ended up destroying their own lives and the lives of others?

Theresa Villiers: I urge anyone who is planning any form of commemoration to consider the impacts of their decisions and choices on people from all sides of the community. I certainly have concerns about the sort of commemoration to which the hon. Gentleman referred. As well as addressing matters relating to the past, it is important for both the Executive and the UK Government to focus strongly on sustaining the recovery in Northern Ireland’s economy. It is going well—unemployment is falling—but there is, of course, more to do to tackle youth unemployment. This Government will continue to do so through their long-term economic plan.

Welfare Reform

Andrew Gwynne: What recent assessment she has made of the effect of the non-implementation of welfare reform on the Northern Ireland Executive’s budget.

Theresa Villiers: The failure of the Executive to implement welfare reform means that Northern Ireland is retaining a system that too often fails the people it is supposed to help by trapping them in dependency and discouraging work. This failure also means that financial savings are being forgone and other areas of public spending in Northern Ireland are being cut as a result—for example, the budget for policing and justice.

Andrew Gwynne: I think I am grateful to the Secretary of State for that garbled answer. Will she confirm that she is in agreement with all the Northern Ireland parties that the bedroom tax is a pernicious policy? Given that, will she tell us what proportion of the overall budget cuts proposed for Northern Ireland are directly related to the non-implementation of welfare reform?

Theresa Villiers: I believe that of the £87 million of savings forgone for this year, around £16 million relates to the spare room subsidy, which is all about fairness to ensure that the rules for the social sector are the same as those for the private rented sector. I do not think that is an unreasonable position. The reality is that our welfare reforms are about encouraging people into work, reforming the system to ensure that work always pays and ending the perversities and arbitrary cliff edges that saw people trapped on benefits under the old system, which Labour manifestly failed to reform.

Ian Paisley Jnr: Sinn Fein MPs claim to be fighting welfare reform. When did the Secretary of State last directly challenge Sinn Fein MPs to come to this House, to take up their places and to fight it from these Benches? If they are not prepared to do that, when is she going to remove the £600,000 a year they receive for not coming to this House?

Theresa Villiers: I think it would be far better if Sinn Fein took their seats. That would give them the opportunity to debate these important Northern Ireland matters. I know that the contribution of all the Northern Ireland parties who take their seats in this House to the debate
	on welfare reform was very much welcomed. Now is the time to get on with this. Failing to implement welfare reform is putting severe pressures on departmental spending in a range of other areas for the Executive, including policing.

National Crime Agency

William McCrea: When she expects the National Crime Agency to be fully operational in Northern Ireland.

Theresa Villiers: Justice Minister Ford has submitted a paper to the political parties which sets out enhanced accountability arrangements for the National Crime Agency in Northern Ireland. I would urge all parties in the Executive to accept the full implementation of the NCA’s remit without further delay.

William McCrea: Bearing in mind last week’s statement by the Under-Secretary of State for the Home Department, the hon. Member for Staffordshire Moorlands (Karen Bradley) that the consequences of not acting on the NCA was potentially devastating, with drugs and violence on our streets, children being abused and vulnerable people defrauded, how can the Secretary of State justify that Minister going on to say
	“If agreement is not reached, we will have to accept that the NCA will not be fully operational for the foreseeable future”?—[Official Report, 22 October 2014; Vol. 586, c. 967.]
	Surely that is an intolerable situation, handing a veto to Sinn Fein.

Theresa Villiers: The Government take their obligations under the devolution settlement very seriously, but there is no escaping the fact that this is a matter for the political parties in Northern Ireland to decide, and that choice has consequences. As the hon. Gentleman said, the decision by the two nationalist parties to reject the NCA’s remit means criminals not arrested, assets not seized, and victims suffering.

Mr Speaker: Order. These are very important matters appertaining to Northern Ireland. Let us have a bit of quiet for Lady Hermon.

Lady Hermon: Thank you, Mr Speaker. That was very gracious of you.
	In the absence of the operation of the National Crime Agency in Northern Ireland, what steps are this Government taking to ensure that Northern Ireland does not again become a honeypot for human traffickers, drug traffickers and other gangs of organised criminals?

Theresa Villiers: We have been working with the NCA, Minister Ford and the Police Service of Northern Ireland to ensure that the NCA can do everything possible to help Northern Ireland, within the constraints of being able to operate only within the devolved field. It is able to do some work on human trafficking, for example, and significant effort has gone into ensuring that it can take over the cases involving proceeds of crime that it inherited from the Serious Organised Crime Agency. We are doing all that we can to maximise the support that the NCA can give in Northern Ireland, within the limitations set by the Executive.

Unemployment

Jim Shannon: What steps she is taking to ensure that the change in Northern Ireland’s unemployment rates is similar to that of the rest of the UK.

Theresa Villiers: Northern Ireland’s claimant count has fallen for 21 consecutive months, which shows that the Government’s long-term economic plan is working. The latest labour market survey shows that the level of unemployment in Northern Ireland is 6.1%, which is only marginally higher than the United Kingdom figure.

Jim Shannon: As the Secretary of State well knows, unemployment has been reduced in parts of Northern Ireland, but we can do more. The agri-industry in my constituency can provide more jobs if it is helped to do so, and the same applies to the pharmaceutical industry and tourism. What can the Secretary of State do, along with other Ministers here on the mainland, to enable those sectors to expand and provide more employment for young people and those aged over 50?

Theresa Villiers: One of the main ways in which we can help is through the tax system. That is why we have cut corporation tax, which will be the lowest in the G20 by April, and why we are cutting job taxes for employers for the benefit of, in particular, young unemployed people. We think that it is vital for more people to have the security of a pay packet to take home to their families, and our tax policy has been driven by that.

Parades Commission

Sammy Wilson: What the cost to her Department was of the Parades Commission in each of the last five years.

Theresa Villiers: The cost of the Parades Commission was £1.01 million in 2013-14. In the preceding four years it was £1.37 million, £0.93 million, £1.07 million and £1.01 million respectively.

Sammy Wilson: Rather than reducing the tension surrounding parades, the Parades Commission has actually contributed to further tension because of its bias against the Orange Order, its incompetence, and its propensity to give in to republican protesters. Does the Secretary of State agree that we now need a root-and-branch change in the way in which contentious parades are dealt with in Northern Ireland?

Theresa Villiers: The Parades Commission faces a hugely difficult task in adjudicating on highly sensitive parades, and I think that it performs that task well. If the political parties in Northern Ireland want a different system for parading, that is open to them, but the only way in which to achieve that is to get round the table and consider future reform in the cross-party talks that are now under way.

Cross-Party Talks

Naomi Long: What lessons have been learnt from the previous talks processes, and what outcomes she expects from the current round of talks.

Theresa Villiers: Previous talks processes have demonstrated what can be achieved when political parties engage seriously and constructively, and are prepared to make difficult decisions in order to reach an accommodation.

Naomi Long: The lack of serious political engagement in the current round of talks, which is characterised by the fact that parties are still squabbling over whether or not they are attending the talks, does not bode well for the future. Meanwhile, in my constituency, a young man has been hospitalised with head injuries, police officers have been injured, and pensioners have been terrified in their own homes after three successive nights of violence. What sanctions will the Secretary of State impose on the parties that fail to show the will to resolve the outstanding issues in this process?

Theresa Villiers: It is important that all the five parties are engaging in this talks process, and I would encourage them to take this very seriously. It is crucial that we find a way forward on these matters. I wholeheartedly condemn what has gone on in the hon. Lady’s constituency not just over the last few days but over a series of weeks. There have been continuing problems with that interface. It is utterly disgraceful that the teenage boy was hospitalised as a result of this sectarian violence, and I hope it will be tackled with the full force of the law.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Ian Lucas: If he will list his official engagements for Wednesday 29 October.

David Cameron: This morning, I had meetings with ministerial colleagues and others and in addition to my duties in this House I shall have further such meetings later today.

Ian Lucas: As I walked to Parliament this morning past the increasing numbers of people who are sleeping on Victoria street pavement, I reflected that this Government are the first since the 1920s to have presided over a real-terms fall in average wages for their people. Is this record of failure really the best this Prime Minister can offer to the United Kingdom?

David Cameron: What we have actually seen under this Government is a record fall in the number of unemployed people over the last year. Also, the hon. Gentleman might want to make reference to the fact that this morning, the Office for National Statistics has produced the figures to show that the number of workless households going down by 671,000 in our country. The number of children growing up in a home where nobody works is down by 387,000. What that means is all those children growing up seeing one of their parents going out to work, putting food on the table, providing for that family, proving a role model for their children. That is a record to be proud of.

William Cash: Nicola Sturgeon this morning has called for a separate majority for Scotland in the event of an EU referendum, which is a reserved matter in respect of the Scotland Act 1998. Will the Prime Minister refuse her request—or demand—and will he also condemn the Liberal Democrats for what appears to be a veto over our referendum Bill?

David Cameron: We are one United Kingdom, there will be one in/out referendum and that will be decided on a majority of those who vote. That is how the rules should work. I am very disappointed that we will not be able to take forward the referendum Bill in this Parliament—it was not possible to get agreement on a money resolution—but people should be in no doubt: if they want an in/out referendum, there is only one way to get it, and that is to return a Conservative Government.

Edward Miliband: A vital tool that has helped to bring murderers, rapists and paedophiles to justice is the European arrest warrant. Why is the Prime Minister delaying having a vote on it?

David Cameron: I am not delaying having a vote on it. There will be a vote on it. We need, in order to have a vote on it, the small matter of a negotiation to take place within Europe, which up to now the Spanish have been blocking. I think the Spanish will shortly remove their block, and at that moment we will be able to have a vote.

Edward Miliband: We all know the reason why the Prime Minister is not having a vote: it is the by-election in Rochester and Strood. He is paralysed by fear of another Back-Bench rebellion on Europe. So I want to make an offer to him. We have a Labour Opposition day next week. We will give him the time for a vote on the European arrest warrant, and we will help him to get it through.

David Cameron: There is only one problem with the right hon. Gentleman’s second question: we are going to have a vote, we going to have it before the Rochester by-election—his questions have just collapsed.

Edward Miliband: All I can say is that I look forward to us walking through the Lobby together to vote for the European arrest warrant: two parties working together in the national interest—or maybe, given the Prime Minister’s Back Benchers, one and a half parties working together in the national interest.
	Turning from Home Office dithering to Home Office incompetence, can the Prime Minister explain why the number of asylum applicants awaiting a decision has risen by 70% in the last year?

David Cameron: First of all, let me just add some details of the vote on the European arrest warrant, because this is an important issue. What we have achieved with the Justice and Home Affairs opt-out is the biggest transfer of power from Brussels back to Britain by opting out of over 100 measures, but it is important that we take action to keep Britain safe, particularly from serious criminals and terrorists, and the European arrest warrant offers the best way of doing that. I would stress to those who are concerned about this that the European
	arrest warrant is very different from the arrest warrant that was first introduced under the last Labour Government. A person cannot now be extradited for something that is not a crime in Britain, and judges are now able to reject European arrest warrants and have done so in many cases. Nor can a person be extradited if there is going to be a long period of detention. These are all important considerations.
	I am sure that the right hon. Gentleman is looking forward to walking through the Lobby with somebody, because he has had rather a lonely week, with the loss of his leader in Scotland, the total shambles in Yorkshire and all the other problems that he has. His next question was, I think, about asylum and immigration. Let me just say that we inherited from Labour a complete and utter shambles: a Department that was not fit for purpose, computer programmes that did not work and an immigration system that was a complete mess. Before he asks his next question, he might want to apologise for the mess that Labour made.

Edward Miliband: On this day of all days, there is only one person who should be apologising on immigration, and it is the right hon. Gentleman, for his total failure. He is not putting it right; he is making it worse. Since 2010, the backlog has gone up, not down, and this Government have wasted £1 billion on failed IT projects and lost track of 50,000 people. What was his promise before the election? He said that he would reduce net immigration to tens of thousands a year. What is net migration now?

David Cameron: Net migration is down a quarter from its peak under Labour, and net migration from outside the European Union is down to its lowest level since 1998. The right hon. Gentleman talks about records; I am happy to contrast our records any time. Under Labour, net migration quadrupled and 2.5 million extra people came into our country. In 2004, Labour gave eight new European countries unrestricted access to our labour markets. He forgot to mention immigration in his conference speech altogether. And of course there was that remark by Peter Mandelson admitting that the last Labour Government sent out “search parties” to look for extra migrants to bring to this country. I ask the right hon. Gentleman again: get up and apologise for your record.

Edward Miliband: The right hon. Gentleman could not tell us the figure. He made a promise of tens of thousands, but it is now 243,000. He published his contract with the British people at the election. On immigration, he said:
	“If we don’t deliver our side of the bargain, vote us out in five years’ time.”
	Why does he not just own up? He has broken his promise.

David Cameron: We have cut immigration from outside the EU by a third, we have closed down 700 bogus colleges and we have introduced new rules on benefits—all this clearing up the shocking shambles and mess left by the last Labour Government. Will the right hon. Gentleman just accept one thing—namely, that in 2004, the decision to allow every single new member state to come to Britain was a catastrophically bad decision? We opposed it at the time and I ask him again: will he apologise for that appalling decision?

Edward Miliband: The right hon. Gentleman has been Prime Minister for four and a half years, and it has got worse, not better. On immigration, this Government combine callousness with incompetence. They do not show basic humanity, saying that rescuing drowning people is a “pull factor” for immigration, and they are so incompetent that they cannot deliver their basic promises. Why does he not just admit that, on immigration, he has failed?

David Cameron: On immigration, we inherited the biggest mess this country has ever seen. Immigration from outside the EU down, benefits restricted and proper rules when new members join the European Union—all that is clearing up the mess made by Labour. What did we hear today? Not a single word of apology from a party that sent out search parties to look for more migrants. The British people know we are making every effort to control migration and that the right hon. Gentleman would make no effort at all, because he has got no leadership.

Andrew George: If the Prime Minister wants his European Union (Referendum) Bill to proceed, as he claims he does, all he needs to do is demonstrate a level of mature engagement on the granting of money resolutions. Is he proud of the fact that his party is abusing the privilege of Executive power and denying the clear will of this House by denying the money resolution for the private Member’s Bill to protect the vulnerable and disabled from the bedroom tax?

David Cameron: I am afraid the problem with my hon. Friend’s point is that his Bill is literally a bill: it would cost more than a billion pounds for the British taxpayer. That is why it would not be right to give it a money resolution. But if he believed in democracy, he would recognise that the European Union (Referendum) Bill passed this House with a massive majority and went into the House of Lords. We should reintroduce it as a Government Bill—that is what ought to happen.

Kelvin Hopkins: The tax gap has been calculated at a massive £119.3 billion, even a quarter of which would transform public finances, yet the Government have chosen to cut Her Majesty’s Revenue and Customs’ staffing by more than 11,000 since 2010 and have utterly failed to close that tax gap. Instead, they are squeezing the poor and cutting the real wages of millions of low-paid workers. Are the Government simply protecting their fat-cat billionaire pals from paying their taxes?

David Cameron: Let me tell the hon. Gentleman what is actually happening on taxation: we have taken 3 million of the lowest-paid people out of tax altogether, and the fact that that means less work for HMRC is welcome; and the top 1% of taxpayers are paying 27% of all income tax—a higher percentage than ever happened under the last Labour Government.

Liam Fox: The preposterous demand for more British money for Brussels is a small part of a much bigger picture. The big picture is that the eurozone is failing and threatening global financial stability. Countries in the eurozone have higher unemployment, lower growth and a higher risk of deflation.
	Why should Britain be paying for the failures of the eurozone? Does the Prime Minister agree that European leaders’ denial of the reality of the eurozone is turning it into the European economic horror version of the emperor’s new clothes?

David Cameron: My right hon. Friend makes an important point, which is that there is a risk the eurozone could go into its third recession in just six years, given how low growth rates are at the moment, and obviously we are not immune from that. So one of the problems we have, whether on the EU budget or on the issue of migration, is that we are the victims of the success of our economy and its growth in comparison with the eurozone. Just on the issue of the £1.7 billion bill, it is worth recalling what the Dutch Finance Minister said in an interview yesterday. He said:
	“I must be able to defend it in front of the Dutch people and Parliament. As long as I can’t see the numbers, I can’t defend it and then I won’t pay before 1 December.”
	I think he is right.

Barry Sheerman: I am sure the Prime Minister cares about families, particularly those under great stress. Is he aware that up and down our country there are stressed families with a challenged or challenging child who cannot obtain any help from mental health services. Research that I have conducted shows that in two thirds of our country the access is not there—not in three months, not in six months and not in a year. What can we together do to stop this dreadful system?

David Cameron: I agree with the hon. Gentleman about the importance of mental health services. We have taken some important steps forward, for instance, giving parity of esteem for mental health in the NHS constitution, and recently announcing additional money and additional waiting time targets for mental health services. We all know from our constituency surgeries how many people are in need of these services, which may actually help them and prevent there being further pressures on the NHS if they are given.

John Glen: The Prime Minister will be aware of the outstanding work done at Porton Down in my constituency to combat Ebola. However, Public Health England has refused to evaluate fully an option to create a UK centre for global response to infectious diseases at Porton and instead persists with its recommendation to move many key scientists elsewhere. Will the Prime Minister meet me to discuss that matter and ensure that the future of public health, the life sciences industry and the taxpayer are well served by the decision ultimately made for public health in England?

David Cameron: Let me, through my hon. Friend, thank everyone at Porton Down for the vital work they do on these sorts of diseases and indeed for the work they are doing on testing for Ebola, as it requires brave and courageous people to carry it out. On the meeting that he wants, the Health Secretary is sitting next to me and he says he is happy to meet him to discuss this issue in detail. We want to see life sciences and these areas succeed in Britain, and Porton Down has an important role to play.

Ian Austin: I have held a dozen public meetings on immigration over the past few weeks, and it is absolutely clear that my constituents in Dudley do not think it is fair that people should be able to come to the UK to be unemployed. They do not think that people should be able to claim benefits as soon as they arrive, or, as the Prime Minister proposes, after a few short months. They think that people should have to work and contribute and pay into the system first. They certainly do not think it is fair that people should be able to claim child benefit for children living abroad. When will he be able to sort out those things?

David Cameron: I do not want to be uncharitable to the hon. Gentleman, who put his question in a reasonable way, but I long remember the years when he sat behind the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as his Parliamentary Private Secretary, and I do not think that he whispered any of those things into his ear—he whispered quite a lot of other things into his ear by the way. I absolutely agree that we need to deal with this issue about sending benefits home, and we will . We have already lengthened the amount of time that people have to be here before they claim benefits, and we want to go further on that. But we must be frank about this: the British people are our boss, and they want this issue sorted. It is not simply about people coming here to claim or to abuse the system, but about the pressure on our health and education systems and on our schools and communities. The people want it addressed and they know that, with this party, we will address it.

Tessa Munt: I thank the Prime Minister for meeting Lawrence Dallaglio and me to discuss the lack of innovative radiotherapy, and I welcome his help in trying to solve the problem, but is he aware that NHS England overspent the cancer drugs fund by £30 million last year and that it has taken that money from the radiotherapy budget? Will he look into that and get NHS England to put that money back into radiotherapy?

David Cameron: I very much enjoyed meeting the hon. Lady and Lawrence Dallaglio, who is doing excellent work on these more innovative radiotherapy treatments that should become more widespread; the case that he makes is extremely powerful. The overspend on the cancer drugs budget was the result not of some sort of maladministration but of more cancer victims wanting more drugs, and under this Government they are getting them. That is not disadvantaging other parts of the health service, but I will look very carefully at what she has said and ensure that these treatments go ahead.

Elfyn Llwyd: Given that the Prime Minister said that the Barnett formula is here to stay, is it not high time now to give Wales parity of funding with our friends in Scotland, and, once and for all, to give fair funding to Wales?

David Cameron: I know what I said about the Barnett formula, and I will not go away from that. What we need to see in Wales is a real debate about what I call a double yes—yes to another referendum on tax-raising powers and yes to those powers so that the
	Welsh Assembly takes greater responsibility for raising and spending more of its own money. That is the right pathway.

Glyn Davies: As there has never been a major hospital in Montgomeryshire, my Welsh constituents have always accessed treatment in England. They have to wait a minimum of 26 weeks for treatment. Their close neighbours living over the border wait a maximum of only 18 weeks. Does the Prime Minister think that that is fair?

David Cameron: I know that there are some real issues of fairness here, and that there are many more patients travelling from Wales to England than there are from England to Wales. Waiting times are quite different. For example, the typical average waiting time for a hip replacement in England is 70 days, but in Wales it is 170 days. That is not right. The Opposition cannot have it both ways. They want to blame the politicians in England for the NHS, but they take absolutely no blame for the appalling state of the NHS in Wales.

Hazel Blears: This week, Jamshed Javeed, a young science teacher from Bolton, a husband and a father, has pleaded guilty to serious terrorist offences. Like hundreds of others, he has been radicalised by a poisonous ideology. The Home Secretary promised in her conference speech to make Prevent a statutory duty on all public sector organisations, and she promised a counter-extremism strategy that would tackle all forms of extremism. When will the Prime Minister take action and make the resources available necessary to implement that promise?

David Cameron: As the right hon. Lady knows, I have great sympathy with her views. I think there is cross-party agreement between at least me and her about the importance of combating not just violent extremism but all forms of extremism. She will be delighted to know that the Home Office is drawing up this strategy, and we had our first discussion of it in the extremism taskforce. Progress is good, and we do want, as she said, to put these arrangements on a statutory footing. There may be opportunities in the anti-terrorism legislation that will come before the House, and I want us to make progress on all these issues.

David Amess: Does my right hon. Friend agree that the field of poppies at the Tower of London is a stunning and deeply moving way of honouring all those who lost their lives in the first world war? Does he further agree that it serves as a timely reminder that in any conflict there can be a terrible loss of human life?

David Cameron: My hon. Friend is absolutely right. It is a stunning display, and it is extremely poignant and reminds us of how many people gave their lives not just in that conflict, although obviously the slaughter was horrendous, but in so many conflicts since then where our armed services personnel have been defending our freedoms and our way of life. Perhaps it is particularly poignant in this week when we think about the final troops returning from Afghanistan, and the 453 servicemen
	and women who were lost and the many hundreds who will be living with life-changing injuries whom we must make sure we look after for the rest of their lives.

Heidi Alexander: Last week, A and E figures showed that the four-hour waiting time target has been missed for the 65th week in a row. Does the Prime Minister honestly think this is acceptable?

David Cameron: Of course, we want to meet the A and E targets every week of the year, and that is our aim, and that is why we put £12.7 billion extra into the NHS. There are 800 more doctors working in our emergency departments than there were when I became Prime Minister. One of the pressures that we face is 1.3 million more patients every year going into accident and emergency. [Hon. Members: “Why?”] There are a lot of shouts of “Why” from Opposition Members. They might start with their own GP contract. They might think about that. We need to enhance GP services, put the resources into A and E, improve public health, help with our frail elderly—all the things set out in Simon Stevens’ excellent plan, which needs to be backed by the money and the successful economy that this Government are delivering.

Bob Russell: More people live in Essex than voted yes in the Scottish referendum. With fairness needed for citizens in all parts of the United Kingdom, does the Prime Minister agree that what Scotland gets, so should the people of Essex and East Anglia?

David Cameron: This is becoming something of a theme in my hon. Friend’s questions. The best answer I can give is that if we are to keep all our promises to the people of Scotland in terms of additional powers to the Scottish Parliament, including tax-raising powers, as I believe we should, we must make sure that Members of Parliament for Essex or other counties and towns in England, have the ability to vote on these issues as they affect England in this House. My concern is that the Labour party seems to have completely given up on this issue. It is happy to have an all-party agreement when it comes to Scottish powers, it is happy to have an all-party agreement when it comes to Welsh powers, but for some reason, when it comes to England, it has absolutely nothing to say.

Kate Hoey: Will the Prime Minister explain why, in Scotland, Northern Ireland and Wales, it has been possible to reach a settlement with the Fire Brigades Union on the question of pensions and early retirement, yet in England, where the new Minister was having constructive discussions, last week somebody above her said, “No, no more”, and now we face a four-day strike? Will the Prime Minister intervene, show some common sense, get the FBU round the table and sort this, because it could be sorted tomorrow?

David Cameron: I hope that the hon. Lady is right that this could be sorted out tomorrow, because I think that is what everyone wants to see. I am sure that all Members have met members of the Fire Brigades Union in our constituency surgeries and listened to their arguments,
	but in the end this has to be settled by the employers and the trade union. I know that the Minister will have listened very carefully to what the hon. Lady has said.

Mark Pritchard: Is the Prime Minister aware of Shropshire’s economic success? Over the past few months we have seen more jobs created in the county than ever before. In fact, since the previous Labour Government left office, we have seen a dramatic fall of up to 46% in the number of people claiming jobseeker’s allowance. In fact, today we have the lowest unemployment record ever in the county, and in The Wrekin parliamentary constituency it is just 1.9%. Is not that more evidence that the Government’s long-term economic plan is working?

David Cameron: I am grateful to my hon. Friend for bringing that to the House’s attention. The fact is that the claimant count in his constituency of The Wrekin is down by 40% over the past year alone, and we now have 2 million more people employed in the private sector since the election. As I said at the outset of Prime Minister’s questions today, the figures for the fall in the number of workless households—homes where no one has been working—including homes with children, are not just statistically important; it is a socially and morally important fact that children will grow up in homes where someone is working. The employment rate for lone parents has also gone up. [Interruption.] I know that Labour Members do not want to hear good news, but the fact is that, because our long-term economic plan is working, we are getting the British people back to work.

Jim Shannon: I know that the Prime Minister, like me and the rest of the Democratic Unionist party, is fully committed to the full implementation of the military covenant. Why, then, have the Government failed to keep records for all the 30,000 personnel who served in Afghanistan and returned to the United Kingdom of Great Britain and Northern Ireland, many of whom came back with injuries that should have been given priority for treatment under the military covenant? Will steps will he take to rectify that situation?

David Cameron: As the hon. Gentleman knows, we want to see the military covenant honoured properly in every part of the United Kingdom, including Northern Ireland, and I am happy to help with that. On the issue of how we keep in touch with veterans, I think that we have made some breakthroughs. The veterans information service now contacts all those who have been discharged from the armed forces a year after they leave, as set out by my hon. Friend the Member for South West Wiltshire (Dr Murrison) in his report. We are copying from the best countries around the world on how we help our veterans, and because we are taking the LIBOR funds—multimillion pound funds from the City—and putting them into veterans charities, there is real money to support our veterans.

Stephen Barclay: Does the Prime Minister agree with senior US officials who said last week that Qatar is still a permissive jurisdiction for terrorist finance? Will he press the emir
	and report back to the House on what action is being taken within Qatar and on those individuals named on the UK sanctions list?

David Cameron: I will be talking to the emir very shortly, and of course we will discuss all these issues, particularly how we can work together to combat extremism. Qatar has recently introduced a new Act to ensure that charities are not abusing charitable status and giving money to inappropriate organisations, and we will want to ensure that that is working properly. I commend my hon. Friend for his persistence on this issue, because it really does matter that we work with all our allies to ensure that extremist and terrorist groups do not get the support that they seem to be.

Dan Jarvis: Research published this week shows that there are now more than 5 million workers stuck in low-paid jobs, women’s wages are lower now than they were a year ago and the gender pay gap is widening. We on the Opposition Benches have been clear about how we would strengthen the national minimum wage. What is the Prime Minister going to do to make work pay?

David Cameron: What we need is more jobs, which we are getting. We need to see the minimum wage increase, which it just has. Then we need to lift people out of tax by raising the tax threshold. We are doing all three of those things. On the minimum wage, we have just seen it go up to £6.50. What we have seen from the Labour party is a plan to put it up to £8 by 2020, but reasonably assumptions about inflation rates show that the minimum wage will have gone beyond that level by 2020. These geniuses on the Opposition Front Bench thought all summer about what would be a really good plan to help people, and they decided to cut the minimum wage. No wonder they are melting down in Scotland, they have a crisis in South Yorkshire, nobody trusts the shadow Chancellor and nobody believes the leader. It is the same old Labour party—a complete and utter shower.

James Gray: At 3.30 this afternoon, 120 members of the Royal Navy, the Royal Marines and the Royal Fleet Auxiliary will march through Carriage Gates down to the North Door of Westminster Hall in commemoration of all they have done for this nation in Afghanistan and across the globe. Will the Prime Minister, other Members from both Houses and staff throughout the Palace find time to join me at the great North Door of Westminster Hall to thank them for all they have done?

David Cameron: I will certainly encourage all hon. Members to do this and I will examine my own diary to see whether there is any chance that I can come along too. We should take every opportunity to thank our armed services personnel, particularly for what they have done in Afghanistan. Fourteen long years we have served and many people have been there once, twice or even on three different tours. They deserve our thanks and congratulations for their service and courage.

Margaret Beckett: Last week, the Prime Minister was asked why 16 health organisations, which include doctors, nurses and patients,
	say that health and social care services in England—that is the bit he is responsible for—are at breaking point. He has made a lot of allegations about the position in Wales. Can we now have an English answer to an English question?

David Cameron: What I would say to the right hon. Lady is that of course there are pressures in the NHS but I think it is worth listening to the new chief executive of NHS England—someone who worked for the Labour party when it was in government—who said:
	“Over the past five years…the NHS has been remarkably successful…We’re treating millions more patients than five years ago...the NHS has become some £20 billion more efficient”.
	Those are things that we should recognise. Of course there are pressures, but what we need, and Simon Stevens says this very clearly, is improved efficiency and to make sure that we get rid of unnecessary demand for the NHS by investing in public health—and, yes, money is required. But as Simon Stevens puts it, we get more money only if we have a successful economy. As he said,
	“a tax-funded health service requires a healthy UK economy”.
	We have a healthy UK economy, and we will have a strong NHS.

Henry Smith: A recent TaxPayers Alliance study revealed that the amount of taxpayers’ money being spent on union office space is the equivalent of £27.4 million at London market value, with a square footage equivalent to that of the Kremlin. Does my right hon. Friend agree that it is time for further political funding reform?

David Cameron: I think it is necessary to cap the donations that unions make to parties and that should be introduced. My hon. Friend comes up with an ingenious idea: if trade unions have so much extra space, maybe they should do what the Government are doing and make additional space available to entrepreneurs so that we can have more start-ups and more enterprise. That is a contribution that the trade unions could make.

Joan Walley: May I tell the Prime Minister that sadly my constituent better known as Boomer, Port Vale football club’s beloved mascot, had a stroke last week? He was discharged home only to be told that he could face an eight-week wait for urgent speech and language therapy. Can the Prime Minister set out how the Government will ensure that there are community stroke specialists and speech and language teams giving the right community care support from day one, in both Stoke-on-Trent and the rest of England?

David Cameron: The hon. Lady is absolutely right that we need to do better in treating the consequences of a stroke. The NHS has made some very big improvements on diagnosing and treating stroke victims as a stroke happens; we have seen that with the better arrangements for taking people to hospitals that have that expertise. But what is now required is more effort really to look at how we can make someone who has had a stroke have a better quality of life. More money is going into that. More research and effort are being done, and I am happy to look at her particular case.

Points of Order

John Baron: On a point of order, Mr Speaker. Following the failure of the European Union (Referendum) Bill because the Labour and Liberal leaderships will not trust the British electorate on this issue, what guidance can you give on how best to proceed given that there is no money resolution?

Mr Speaker: I have to say to the hon. Gentleman that it is not for me to offer guidance on that matter. Procedural matters relating to Bills which have been committed to Public Bill Committees are matters exclusively within the competence of the Chair of the said Committee. Moreover, as I rather imagine that he knows, but I emphasise for the awareness of Members of the House more widely, money resolutions are exclusively a matter for the Government. Those are waters in which the Speaker does not tread.

John Mann: On a point of order, Mr Speaker.

Mr Speaker: If the hon. Gentleman will forgive me, I will take the point of order from Mr Andrew George first, and then I will come to him.

Andrew George: Further to that point of order, Mr Speaker. In respect of the provision and tabling of money resolutions, and further to your advice a moment ago, can you please tell the House on what previous occasions there have been circumstances where, on Second Reading of a private Member’s Bill, the will of this House has been clearly demonstrated through a desire to proceed with that Bill but has been frustrated by an Executive who are clearly abusing the privilege of their Executive power in the way that they are with the private Member’s Bill on affordable homes?

Mr Speaker: I do not wish any discourtesy to the hon. Gentleman, but it is not for the Chair either to be subject to, or the purveyor of, a history lesson on these matters. I would say to the hon. Gentleman, who is nothing if not an eager beaver, that he should consult the Journal Office, and I think that he will go away, as a result of so doing, significantly better informed.

John Mann: On a point of order, Mr Speaker. Following the most violent and vitriolic abuse, using Twitter, of my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), an individual was jailed for four weeks. Despite this, or perhaps because of it, the abuse has worsened and deepened on precisely the same issue in the same violent way. If the medium used were a newspaper, I am quite certain that the House would demand that the editor be dragged to the Bar of the House and forced to explain himself or herself. What advice would you give, Mr Speaker, on how to handle the internet, and specifically Twitter, which is the medium by which this abuse against one of the Members of this House is continuing on a most violent and daily basis?

Mr Speaker: I am grateful to the hon. Gentleman for his point of order. My immediate reaction is twofold. First, where a crime has been committed—he referenced
	at the outset of his point of order the fact of a crime and, indeed, of a conviction—that is a matter for the police and the prosecuting authorities. Secondly, and more widely, in so far as the hon. Gentleman has referenced an outrageous instance, or series of instances, of anti-Semitic abuse, I think that the whole House would be united in concluding that that behaviour was both despicable and beneath contempt. Although I would not ordinarily seek to personalise such matters, as the hon. Gentleman referred to the hon. Member for Liverpool, Wavertree (Luciana Berger) being on the receiving end of this abuse, I think that decent people throughout the House and across the country would empathise entirely with the hon. Lady and share my own assessment of the people responsible for that gratuitous abuse. [Hon. Members: “Hear, hear.”]

John Mann: Further to that point of order, Mr Speaker.

Mr Speaker: I am not sure that there is much further, but I will hear the hon. Gentleman.

John Mann: The issue of criminality is well understood and is a matter for the police, not the House, but this is about the medium of communication. If it were a newspaper, then the newspaper would not be committing criminality by allowing itself to be used as the vehicle, and the House would want to have a view on how that newspaper should be held to account. There is precedent from 1956, with John Junor, on how that was done. How can the House hold Twitter to account for its failure to act to stop its platform being used for this abuse?

Mr Speaker: The short answer to the hon. Gentleman is that the House can debate whatever the House wants to debate, and hon. Members can seek opportunities to air matters in the usual way. I have a hunch—it is reinforced by the wry grin emerging on the hon. Gentleman’s face—that the idea will by now have occurred to him, if it had not already done so, that he could seek to raise these matters in an Adjournment debate. I just have the sense, although I am of course not psychic, that his application will be winging its way to the appropriate quarter before the close of the day.

Greg Mulholland: On a point of order, Mr Speaker. We now finally have the overarching report into the suspension of the Leeds children’s heart unit, which has exposed very serious failures in the safe and sustainable review process and clear abuse of whistleblowing by both NHS medical professionals and officials. We have not heard anything about any statement, which we clearly need from a Minister at the Dispatch Box, finally to put this matter to rest and allow Members to contribute to that closure so that all such units can move on. May I seek your advice on how we might be able to do that?

Mr Speaker: If memory serves me correctly, Health questions took place relatively recently so it may be some little while before the next scheduled session takes place. However, the hon. Gentleman will be aware that as he raised his point of order, no less illustrious a figure than the Deputy Chief Whip, the right hon. Member for Chelsea and Fulham (Greg Hands), was sitting, as he still is, on the Treasury Bench, and his point will have
	been heard. Furthermore, the hon. Gentleman will know that we have business questions tomorrow, and I just have a sense that he will be in his place to raise this matter and to demand a statement from the Government.

Kevin Brennan: He will have to cancel his train ticket now. [Interruption.]

Mr Speaker: People are going on about train tickets. I am sure that the hon. Member for Leeds North West (Greg Mulholland) was not proposing to toddle off to Leeds tomorrow morning, but if he was, he might decide to reconsider and to be present for business questions. Only time will tell; we shall see.

Railways (Public Sector Operators)

Motion for leave to bring in a Bill (Standing Order No. 23)

Andy Sawford: I beg to move,
	That leave be given to bring in a Bill to amend the Railways Act 1993 to permit public sector railway operators; and for connected purposes.
	Twenty years after privatisation, it is clear that passengers are getting a raw deal. The Tories’ botched privatisation in the 1990s has led to a fragmented railway, which is less efficient to run and more expensive to use than other networks across Europe. The franchise process simply does not work in its current form. The collapse of the west coast main line franchise, at a cost of more than £55 million to the taxpayer, shows just how broken the system is.
	On the east coast, where a public operator has performed really well in recent years, it is banned by law from seeking to carry on as the operator. How can it be right that East Coast Main Line Ltd is the only operator in the world that cannot bid to run this service in the future, despite a track record of success? East Coast has shown that a public option can work for our railways. Every penny of profit that it makes has been reinvested back into the service. For example, East Coast contributed £1.3 million to the £3.3 million upgrade of Peterborough station, which I and my constituents use.
	Instead of continuing this success story, the Government want to re-privatise the east coast main line at an estimated cost of £6 million. That money would be better spent on improving the service, rather than satisfying the Tory obsession with privatisation. Labour is the only party with a plan to reform the railways and put passengers first. With this Bill, I am very pleased to support the brilliant work of my hon. Friend the Member for Nottingham South (Lilian Greenwood), the shadow rail Minister, and my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Transport Secretary, who have set out the reforms that we need.
	The next Labour Government will review this Government’s failed franchising process as a priority. After the chaos of recent years, we will act to safeguard taxpayer and passenger interests by putting in place a system that is fit for purpose. We will learn the lessons of the east coast main line, where we have seen the benefits of a not-for-dividend operator, by legislating to allow a public sector operator to take on lines and challenge the train operators on a genuinely level playing field and in the public interest. That will help to secure value for money for passengers and taxpayers.
	As a Co-operative MP, I am pleased that we have pledged that the next Labour Government will explore co-operative and mutual solutions and the benefits of co-operative principles, and increase the involvement of passengers and employees in transport by giving them a much greater say in the industry. The Co-operative party’s reports, “Rail Cymru” and “A People’s Railway for Scotland”, explore the options for Scotland and Wales. As a localist, I am pleased that Labour is committed to devolving decisions across all areas of the UK on the running of regional and local services, so that areas can bring trains, buses, ferries and trams together into a single network.
	We must tackle the monopoly market for rail rolling stock by giving Network Rail greater responsibility for developing a long-term plan for the procurement and leasing of new rail rolling stock. We will create a guiding mind for the railways by bringing Network Rail together with a representative passenger rail body to contract routes; co-ordinate services and skills in the industry; oversee stations, fares and tickets; and ensure that there is customer satisfaction across the network. We will ease the pressure on fare payers through the efficiencies that our reforms release, by capping annual fare rises on every route, by simplifying fare structures and by creating a new legal right to the cheapest ticket. I know that those proposals will be welcomed by many of my constituents.
	Corby and east Northamptonshire are served by private and public sector rail operators. The contrasting experiences of my constituents demonstrate the need for my Bill. Corby, which is served by East Midlands Trains, recently celebrated five years since Labour opened the new railway station. Corby is the fastest growing town in the country. It was once known as the largest town in Europe without access to a railway system. Use of the station has doubled since it was opened in 2009. It takes 70 minutes on the train from St Pancras. The station is a symbol of Labour’s investment in the regeneration of Corby and it has given a big boost to the local economy. It was campaigned for by the former Labour MP, Phil Hope, and by Labour councillors, and it was delivered by a Labour Government. We are now working to increase the frequency of trains and calling for new northbound services.
	However, we cannot celebrate the fares that passengers face. They are way too high and they price out many people. A constituent told me the other day that he had a medical appointment in London, but he did not know how he would find the more than £100 needed to get there. A Corby to London season ticket costs £7,400 and an open return costs £105. Many constituents in the east Northamptonshire side of my constituency, such as those who live in the town of Oundle or in villages such as Warmington, travel from Peterborough station on the east coast line.
	Although the fares on the east coast main line are still high, the rate at which they have increased has been hugely different. Since 2010, a standard anytime open return ticket from Peterborough to London has increased by £12, or 14%. The equivalent fare from Corby on East Midlands Trains has risen by £20 since 2010, which is almost twice the rate of increase at 24%. This year, East Coast has raised its fares by an average of 1.21%, which represents a genuine real-terms cut in the cost of living for passengers. No private franchisee has taken that step. It would be fair to say that many of my constituents who use Peterborough station still feel that fares are too high, but by comparison, East Coast is keeping fare rises down.
	More than that, East Coast is performing better for passengers. It has achieved record passenger satisfaction and punctuality rates since 2009. It has introduced almost 7,000 more trains a year, and 500,000 more passengers are travelling on the franchise. East Coast has partly funded and helped to deliver a major programme of station upgrades, including at Peterborough station. It is also performing for the taxpayer, having returned more than £800 million to the Treasury.
	East Coast’s passengers and the employees who have worked to make East Coast a success in public hands will not understand why the operator is prevented from taking on the running of other lines, let alone why it is banned from continuing to operate the east coast line. Because of the Tory rules, we will have a situation where European public rail companies can run lines in this country, but our British-owned operator cannot.
	I completely agree with my hon. Friends the Members for Wakefield and for Nottingham South that, instead of Tory dogma and an obsession with privatisation, we need a different approach that puts the public interest first, that reverses the presumption against the public sector and that serves the passenger properly. It is time for reform of an industry that sucks up a vast amount of subsidy, and seems loth to invest it back into the service of which it is custodian, and that provides little redress for passengers stung by ever-increasing fare hikes—[Interruption.]
	The Tories and the Lib Dems are wedded to the status quo: only Labour has a plan for reforming the railways—a new model, with a strong voice from and control by the people who pay for the railways, the taxpayer and the fare payer, and a strong voice for employees who stay working on the railway no matter the colour of the uniform or the paint on the trains. The next Labour Government will review the failed franchising process; legislate to allow a public sector operator to take on the lines; devolve decisions over the running of regional and local services; tackle the monopoly market for rail rolling stock; address the cost of living by capping annual fare rises on every route; simplify fare structures; create a new legal right to the cheapest ticket; and, as Conservative Members have shown today, we will do it all in the face of their opposition. They are standing up for the wrong people. The Bill is just the first step to a railway in which passengers are put first.

Martin Vickers: I oppose the motion and urge the House to reject the arguments put forward. The privatised industry is actually a success—freight tonnage is up and passenger numbers continue to rise. What we have heard from the hon. Member for Corby (Andy Sawford) will be detrimental to the industry, to employees and especially to passengers. It is based on a redundant political dogma. Labour Members who yearn for bygone days when people were prepared to look to the state to run their buses and trains should come to terms with the modern world.
	Wisely, the previous Labour Government made no attempt to reverse the policy during their 13 years of misrule—[Interruption.] Thirteen wasted years, indeed. The change in direction since the days of Tony Blair is striking. The Opposition clearly have no ambition to win elections any more. The very phrase “directly operated railways” conjures memories of a past in which giant state conglomerates ran great swathes of our industry at enormous expense to the taxpayer—[Interruption.] The eyes of Labour Members light up at talk of subsidy. They yearn for the opportunity to subsidise failed industries again—[Interruption.]

Mr Speaker: Order. That is very unseemly conduct from the hon. Member for Easington (Grahame M. Morris). I know you are an excitable chap and a keen parliamentarian, but the voice of Cleethorpes must be heard.

Martin Vickers: Subsidies and propping up ailing businesses at taxpayers’ expense are things that Labour Members understand, but taxpayers want value for money. They want reduced fares, lower taxes and a good railway, which is what we are achieving under the privatised system. Is Labour actually advocating renationalisation? That is what it sounds like. The plan would take us back a generation. It would create a rigged market and passengers would suffer. Under Labour’s plan, the state would write the rules of the franchise, then the state would bid and then the state would decide who had won the race. It would be complex, costly and about an ideological obsession.
	The east coast is a service on life support. It was rescued by the Department for Transport and it does not pay the same access charges. Labour’s plan would be costly—up to £500 million. First, the state would have to pay the cost of compiling the bids at up to £10 million a bid. With 15 franchises in England alone, the bill could be more than £100 million. The hon. Member for Corby did not say where that money would be found. Presumably, in line with normal Labour practice, it would be an additional burden on the taxpayer. Secondly, under Labour’s plan, the state would also have to take on the working capital cost of any franchise it operated, amounting to £400 million for the network. In addition, if the bidding process were to be truly level, performance bonds, season ticket bonds, risk capital and default would all have to be taken into account.
	My constituency takes its name from the east coast’s premier seaside resort, but it also contains the largest port complex in the UK, an international airport and 10 railway stations. Only last week, a parliamentary Committee gave the go-ahead for the development of the south Humber marine energy park by Able UK, with 4,000 potential jobs. That further strengthens the need for better connectivity and the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry)—whom I was delighted to welcome to Cleethorpes only two weeks ago—will know that that would improve the potential of south Humber and north Lincolnshire even more.
	It is private sector railway companies that will provide better services. I remember the days when I could jump on a train in Cleethorpes to go to Doncaster and I would share the carriage with one man and his dog. Thanks to the private operator First TransPennine Express, we have an excellent hourly service and I have every confidence that the Minister will maintain it. We need services expanding and electrification of the line into Immingham, where 25% of the nation’s rail freight starts or ends. I urge the House to reject the motion. The Bill would be a step backwards that my party and I will not support.

Question put (Standing Order No. 23).
	The House divided:
	Ayes 196, Noes 38.

Question accordingly agreed to.
	Ordered,
	That Andy Sawford, Mrs Emma Lewell-Buck, Andy McDonald, Roberta Blackman-Woods, Fiona O’Donnell, Ian Murray, Sheila Gilmore, Alex Cunningham, Ian Mearns, Mrs Sharon Hodgson and Julie Elliott present the Bill.
	Andy Sawford accordingly presented the Bill.
	Bill read the First time; to be read a Second time on Friday 16 January 2015, and to be printed (Bill 111).

National Audit Office

David Cameron: I beg to move,
	That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Lord Bichard KCB to the Office of Chair of the National Audit Office.
	This is only the second time that a Prime Minister has moved a motion to appoint the chair of the National Audit Office and the first time the process has been applied to someone new to the role. It is a direct result of our Budget Responsibility and National Audit Act 2011 to strengthen the governance of the National Audit Office. At a time when we are working hard to deal with our debts, it reflects the critical role of the NAO in scrutinising public expenditure and safeguarding the interests of hard-working taxpayers.
	First, I would like to thank Professor Sir Andrew Likierman who is standing down when his term of office ends in January. As the NAO’s inaugural independent chair, he has played a vital role in establishing the NAO board as an effective governance body.
	The proposed new chair, Lord Bichard, has been chosen following an open competition by a selection panel that included the Chair of the Public Accounts Committee, the Auditor General for Scotland and the permanent secretary of the Treasury. Lord Bichard has had a distinguished career in local and central Government. His many roles have included chief executive of Brent and Gloucestershire local authorities, chief executive of the Benefits Agency and permanent secretary of the Department for Employment, which then became the Department for Education and Employment. He led the vital inquiry into child protection measures following the horrific Soham murders, and also served as chair of the Legal Services Commission, chair of the Design Council and founding director at the Institute for Government.
	I believe Lord Bichard’s extensive experience across the public sector makes him an outstanding choice as the independent chair of the National Audit Office, and I have no hesitation in commending this motion to the House.

Margaret Hodge: This is the second occasion when we have had time set aside in the House to debate the public appointment of the chair of the National Audit Office. I warmly welcome and support the process whereby both the Executive and the legislature are involved in the appointment to this important post, and the fact that the Prime Minister is present to propose to the House the appointment of Lord Bichard. I join him in thanking Sir Andrew Likierman for his excellent stewardship of the organisation over the past few years since its inception.
	I have known Michael Bichard for many years. Indeed, I first met him before he joined the civil service when he was working as a chief executive in local government. He is a man of outstanding ability and clear judgment, and he brings to the role vast experience across the public sector from his roles in local government, leading a government agency and leading a Government Department.
	He has also run a very successful higher education institution and was involved in establishing the Institute for Government as its first director. I have every confidence in his ability to fulfil this new role.
	I agree with the Prime Minister that in the current times, with continuing pressures to reduce public expenditure and borrowing, we need a strong, fearless and high quality National Audit Office to provide well-evidenced information on how the taxpayers’ pound is being spent. Sir Michael’s long experience and undoubted knowledge and expertise make him an excellent choice as chair of this important institution. I am delighted to be able to support the motion before the House.

Richard Bacon: I support the motion. Two years ago, when the Budget Responsibility and National Audit Act 2011 set up the chair of the National Audit Office, there were two chief concerns: to strengthen the governance of the National Audit Office in a way which, it was widely agreed, it could benefit from; and to ensure at the same time the continued statutory independence of the Comptroller and Auditor General in exercising his statutory functions. The CAG is an officer of the House of Commons, and it is vital that his independence and ability to undertake inquiries, wherever he—or she, were there a female doing the job—feels necessary, is unfettered. The 2011 Act needed to pull off the trick of providing both for the chair to have the ability to advise the CAG, and for the CAG to have regard to that advice while at the same time continuing to have
	“complete discretion in the carrying out of…functions”.
	This House owes a debt of gratitude to Professor Sir Andrew Likierman for the way he has carried out that task. I have every confidence that Lord Bichard, who has a very distinguished career in public service, will be able to perform the same function with equal skill. I have no hesitation in commending the motion to the House.
	Question put and agreed to.

Taxation of Pensions Bill

Second Reading

David Gauke: I beg to move, That the Bill be now read a Second time.
	Security in retirement has been a central part of the Government’s agenda. It is important that we adapt to the needs of a population who live longer and who are increasingly active in old age. In the course of this Parliament we have significantly improved the state support on offer to pensioners. From April 2016, the new state pension will give people certainty about what they can expect from the state during their retirement and reduce the likelihood that they will require means-tested benefits. The triple lock introduced at the beginning of this Parliament ensures that increases for the basic state pension will not be outstripped by earnings, growth or inflation. This means that pensioners are now £440 a year better off than they would have been had the state pension only been increased by average earnings since 2011.
	We have also taken steps to help people saving for their retirement. Automatic enrolment, introduced in 2012, gives all employers a duty to enrol all eligible employees into a qualifying pension scheme. In the past two years, approximately 4 million people have been newly enrolled into a pension. By the time the programme is fully rolled out in 2016 up to 9 million will be newly saving for their retirement. This radical reform will transform our culture of saving and increase the amount being saved in workplace pensions by about £11 billion a year.
	Automatic enrolment will ensure that individuals have the opportunity to save into a pension, but we also need to ensure that when they come to access those savings they get a fair deal. This Government have always believed in personal responsibility. If people work hard and save all their lives, when they reach retirement they should be given the freedom to choose how they spend those savings. Through the Bill, we are introducing fundamental reforms to how people can access their defined contribution pension savings. This is the most radical change in the way people take their pensions for almost a century. The Bill contains provisions to: remove the limits on withdrawals from drawdown; make annuities more flexible; create a new way to take money directly from one’s pension savings; prevent the reforms from being exploited for unintended tax purposes; and restrict and reduce tax charges payable on certain lump sum death benefits.
	We have consulted extensively on how best to implement these changes. Given that it is a highly technical and complex area, we have also taken the step of publishing a briefing, available on gov.uk, which explains clearly what each section of the Bill does. Alongside that, Her Majesty’s Revenue and Customs guidance, which is also on the gov.uk website, explains in more detail how the changes are intended to work. The Department for Work and Pensions’ Pension Schemes Bill, which is in Committee, covers the regulatory side to those freedoms, notably the guidance guarantee. These issues are being debated thoroughly as part of the Bill.

Debbie Abrahams: Will the Minister explain why there has been a change in terminology from “advice”—which the Chancellor mentioned in his introduction of the proposed measures—to “guidance”, which, unlike advice, legal protections are not associated with?

David Gauke: We made it clear, in the documentation that was published at the time of the March Budget, that the legal status of the support we have provided is “guidance”. That means that there is a not a recommendation of a specific product; none the less, that support will be hugely helpful for those who will face choices. It is right that the role that we play—or facilitate—is about providing support in the form of guidance, rather than making recommendations of particular products.
	I would like to provide Members with an overview of the different parts of the Bill. At Budget 2014, the Chancellor announced that everyone with a defined contribution pension could take it as they wished from age 55, and would no longer be subject to drawdown limits or income tests before being able to take their money flexibly. The current system denies people flexibility at the point of taking their pension. For those with the smallest and largest pension savings, there is the option to take their pension as cash, but for everyone else there are considerable restrictions. They have two main options: purchase an annuity or enter capped drawdown. Capped drawdown limits how much someone can take out each year to an amount calculated by reference to the amount they might have received from an annuity purchased with their fund.
	Flexible drawdown already lets those with very high levels of savings to take their money however they want, taxed at their marginal rate, if they can prove that they have a guaranteed pension income for the rest of their life of at least £12,000. The Government have already reduced that from £20,000 to give many more people flexibility, but the first main change provided for in the Bill goes much further, making unlimited drawdown available to anyone with a defined-contribution pension and removing the limits on what can be withdrawn from those funds.
	The Bill also ensures that existing drawdown funds can, if the individual wants, be converted to flexi-access drawdown, so that those currently in capped drawdown will be able to benefit too. The aim of the changes is to give all the 320,000 people who retire every year with defined contribution savings greater choice about how to access those savings, regardless of how big their pension pot is. The changes will take effect from 6 April 2015.
	Some people think that this change—allowing everyone access to their own hard-earned money—will cause people to spend recklessly what they made sacrifices to save. The Government do not agree. Those who have saved the money over a lifetime should be trusted to make their own decisions about how best to use it to provide themselves with an income in retirement. Through the guidance guarantee, we are making sure that customers have access to impartial guidance on how to make the most of their money.

Anne Begg: Will the Minister give way?

David Gauke: I am happy to give way to the Chair of the Select Committee on Work and Pensions.

Anne Begg: We agree that it is important that people can access their money and use it how they best see fit, but might not the introduction of these flexibilities lead to there being so many products on offer that some unscrupulous people might offer individuals unsuitable products? What will the Government do to ensure that people are not mis-sold products that are not suitable for them or, indeed, that err on the side of illegality?

David Gauke: The hon. Lady raises an important point. First, the guidance guarantee will ensure that guidance is available to people on what their options might be, to point them in the right direction. Secondly, we recognise that the regulators have an important role to play. The Financial Conduct Authority is very engaged in this matter, setting standards and ensuring proper enforcement. She is right that we must deal seriously with any unscrupulous businesses out there that seek to exploit people, but we have a regulatory regime in place to address that very point.

Tom Blenkinsop: Will the Minister elaborate on the tax implications for the Treasury of these legislative and policy changes?

David Gauke: The hon. Gentleman asks a very broad question about the tax implications. This is a tax Bill, so to some extent my entire speech is about the tax implications, but if he wants to intervene again, I will let him clarify.

Tom Blenkinsop: What are the Treasury’s estimates of the tax take to the Revenue arising from this Bill?

David Gauke: At the time of the Budget, we set out our estimates of the implications for the public finances, certified by the Office for Budget Responsibility. We have also made a number of announcements since the Budget that will have a revenue impact. The Office for Budget Responsibility will return to this issue at the autumn statement, when it will set out its numbers in the usual way. The estimates have yet to be certified by the Office for Budget Responsibility—as one would expect, given that we are still some way from the autumn statement—but an update on the numbers that were published in March will also be set out in December.
	The changes we have announced have resulted in moving some revenue from one year to another, rather than fundamentally changing the face of the public finances, so in broad terms their overall tax impact is not considerable, certainly when compared with the substantial changes that the Government have made, such as increasing the state retirement age or reforming public sector pensions.

Cathy Jamieson: To follow up the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), there has been a suggestion that the change could lead to a windfall for the Treasury at a time when that would be very helpful for future Budgets. What does the Minister say to that suggestion, which has been made by some in the real world out there?

David Gauke: The numbers that we and the OBR believe are likely to be changed as a consequence of the policy were set out in the March document. We very much doubt that there will be a huge windfall for the Exchequer as a consequence of these changes, whatever the appeal of that might be. As I have said, some revenues have been moved from future years into earlier years, but some of the claims about the impact are somewhat exaggerated and highly unlikely.

Lady Hermon: To pick up on the important point made by the Chair of the Work and Pensions Committee, will the Minister seriously consider putting on the face of the Bill a criminal offence of trying to deceive people out of their pension savings? That will act as a deterrent to unscrupulous organisations or individuals from the moment the legislation goes on to the statute book.

David Gauke: The Financial Conduct Authority has already made it clear that if, for example, anyone attempts to present themselves as providing guidance under the guidance guarantee when they are not in a position to do so, that will be looked at very seriously. There is a strong determination to ensure that the dishonest, the unscrupulous and those seeking to mislead people are treated very seriously indeed. We are talking, after all, about a regulated sector, and those who try to conduct regulated activities who are not properly regulated already face offences. I recognise the hon. Lady’s concern about whether we are determined to address those who try to defraud our constituents. Yes, we are absolutely determined to address that, and the FCA is very engaged in that process.

Eilidh Whiteford: I, too, would like to press the Minister on the issue of consumer protection. At the moment, if someone gets bad advice from a financial adviser, they have a degree of protection through the FCA. If people receive advice from those who are not professionals in financial matters—the Minister has conceded that these are complex matters—what comeback will they have?

David Gauke: As I say, the FCA is very engaged in this area and has already set out its determination to ensure that those seeking to mislead face punishment. The FCA has responsibility for ensuring that regulated firms treat their customers fairly and communicate in a way that is clear and not misleading. We believe that it has considerable powers here. Of course, the Pension Schemes Bill is also important in ensuring that the FCA puts in place standards for the guidance guarantee—standards that anyone delivering that service must comply with.

Lady Hermon: I am extremely grateful to the Minister for taking a second intervention so quickly. He has been careful in his words regarding the FCA. We are talking about those who are manipulative and try to deceive people out of their entire life’s pension; it is a really serious issue. I would like him to confirm that when he refers to “serious” punishment and this being taken “very seriously”, it means a criminal conviction for these people. Will he confirm that that is how seriously the FCA will treat this offence?

David Gauke: The FCA will certainly treat this extremely seriously. I entirely share the hon. Lady’s view that this is an important matter and that it is right to take the strongest action to ensure that those who attempt to defraud our constituents of their life savings face severe sanctions. This Bill is about the tax changes; the Pension Schemes Bill deals with the wider issues, and it gives the FCA powers to set standards for the guidance guarantee. Regulated firms have responsibilities to treat their customers fairly, and the FCA has made it clear that it expects firms to comply with that, in this context as in others.

Anne Begg: Even the Association of British Insurers says that there should be more regulation around this issue. Is the Minister listening closely to what the ABI is saying?

David Gauke: We of course engage closely with the ABI and other bodies involved in this area. Indeed, the work in this Bill and in the Pension Schemes Bill is a result of close engagement with the ABI. The Government are determined to ensure that we have a regulatory system that protects our constituents from the unscrupulous. This is principally an issue for the FCA, but we are determined to ensure that it has the powers that it needs. Much in the Pension Schemes Bill relates to that.

Nigel Mills: May I remind the Minister that one reason for bringing forward these freedoms was to try to tackle the mis-selling that already goes on, whereby people are effectively forced by the law to buy annuities, which in many cases are totally unsuitable for them? That has led to real cases of detriment. The mis-selling issues under these freedoms are not new; they have been around for a long time.

David Gauke: My hon. Friend makes an important point. I do not think that anyone would be particularly attracted to the argument that the way to address mis-selling was to force people into a narrow range of products that ultimately did not meet their needs.

Debbie Abrahams: rose—

David Gauke: I would like to make a little progress. That brings me to the second main change in the Bill, which is to make annuities more flexible. Current tax legislation caters for two broad categories of retirement income: lifetime annuities and drawdown. As I have set out, we are making drawdown much more flexible. Let me explain how we are doing the same for annuities.
	We think annuities will still be the right product for many people, as they provide the valuable security of a guaranteed income for life. The current requirements for a lifetime annuity, however, lead to an inflexible and restrictive product, and there is a clear demand for more flexible ways of getting income from one’s pension pot. We want these reforms to stimulate competition and innovation in the retirement income market. We want providers to innovate and create new products that will more closely reflect the changing needs of their customers. We have consulted extensively with industry on the changes that it would like us to make to enable this kind of innovation. The Bill will deliver those changes by allowing annuities to decrease, and by removing the 10-year guarantee period for guaranteed annuities. That
	gives significantly more flexibility to providers to offer products that meet individuals’ needs more closely. Those changes will apply to annuities sold after 6 April 2015.
	The third major change in the Bill is a new method by which people can access their pension. Currently, people who want to take their pension as cash have to take their whole tax-free lump sum—25% of their fund—and place the other 75% in a drawdown fund. Any money they then draw down is taxed at their marginal rate. The Bill will introduce a new option by giving individuals the flexibility to take one or more lump sums from their pension fund—with 25% of each payment tax-free and 75% taxed at their marginal rate—without having to enter into drawdown. This lump sum is known as an uncrystallised funds pension lump sum, or an UFPLS. [Interruption.] It is perhaps not the most elegant of names, but try doing better with “uncrystallised funds pension lump sum”. These payments can be taken from funds that are uncrystallised—that is, have not yet been accessed. It will be open to schemes to provide this option from 6 April 2015 onwards. This does not change the amount of tax people pay on their pension, but it does provide them with extra flexibility and further choice about when and how to access their savings in a way that suits them.
	I want highlight changes that we are making through the Bill to ensure that these reforms, which are intended to give individuals more choices about their income in retirement, are not exploited for tax purposes. If the Government were to take no action, an individual over the age of 55 could divert their salary each year into their pension, take it out immediately and receive 25% of it tax-free, thus avoiding income tax and national insurance contributions on their employment income. That is not the intention of the reforms.
	The Government spend a considerable amount a year on pensions tax relief and have a responsibility to ensure that the money is used for genuine pension saving. Under the current system, individuals in flexible drawdown have no annual allowance. They are not entitled to tax relief on anything that they contribute to their pension after they have accessed it flexibly. Extending this rule under the new system would be disproportionate and would disadvantage average savers. We are in an era of much more flexible retirement. An individual might access their pension flexibly and then decide to return to work, or access it while working. They might still want to save into a pension. They might be automatically enrolled into a pension and be subject to a tax charge on the amount contributed. If we kept the current system, there would be a strong incentive to opt out of auto-enrolment.
	Instead of having no annual allowance, individuals who access their pensions flexibly will, under the new system, have a lower annual allowance of £10,000, which will apply to their defined contribution savings. This approach allows people the flexibility to contribute to their pension even when they have flexibly accessed their pension rights. At the same time, it ensures that individuals do not use the new flexibilities to avoid paying tax on their current earnings. It will prevent those with the means to divert large sums into pensions from doing so, while allowing the vast majority of individuals to continue to save. The Government have
	worked very closely with industry to develop this measure, and will continue to do so to ensure that it remains fair and proportionate.

Tom Blenkinsop: The Minister will be aware that the Pension Schemes Bill is in Committee. I am a member of that Committee, and in our fourth sitting, on Thursday 23 October 2014, a gentleman called Mr John Greenwood, a Financial Times journalist who has written quite a lot on this subject, said that the Treasury’s new policy to limit the amount of money that could be taken out at once
	“will impact on only 2% of the population”.

David Gauke: That is true. However, as I have said, we have tried to ensure that we do not give people an opportunity to use the new arrangements as a way of avoiding substantial amounts of tax, while also ensuring that, in an era of more flexible working, we do not prevent people from gaining access to their pensions and then making further contributions in the circumstances that I have described. We concluded that introducing a reduced £10,000 personal allowance was the best way of striking a balance between those two objectives. We will, of course, continue to look at the matter closely to ensure that the system is not exploited at a significant cost to the Exchequer.

Tom Blenkinsop: The Minister is being very generous with his time. He is also, potentially, being very generous with the Treasury’s coffers. Mr Greenwood said that the allowance
	“will impact on only 2% of the population, so it is a penalty with no teeth for 98% of the population.” ––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 126, Q284.]
	What is the Treasury’s forecast of the potential loss of national insurance contributions?

David Gauke: The Office for Budget Responsibility will return to the issue of the forecast at the time of the autumn statement. Mr Greenwood’s evidence featured some eye-watering numbers, but they were based on extraordinary assumptions about behaviour. All the changes resulting from the reforms that we have announced since the Budget will be announced in the autumn statement in the usual way. We certainly do not recognise some of the numbers that have been floated in relation to cost, but the numbers have not yet been certified by the OBR, so I cannot give the hon. Gentleman the answer that he seeks at this stage. Of course we have been mindful of the impact on the Exchequer, but we believe that our proposals will not put it at risk of losing substantial sums. As I have said, we are not preventing people over 55 from drawing down part of their pensions while continuing to make contributions, or retaining the flexibility to do so. We might have closed off that option, but we decided not to.

Debbie Abrahams: The Minister is indeed being generous with his time. May I ask when the Treasury is likely to publish its assessment of the risks associated with the delivery of this project? It has obviously identified a number of such risks, and it would be helpful for everyone to see the assessment.

David Gauke: A number of elements are involved. We have already estimated the costs resulting from the Budget announcement, and, as is customary, we will update the House about the cost of further changes that
	we have made in the autumn statement. We need to take account of a number of policy announcements that have been made since the Budget. The information will be available once the numbers have been certified by the Office for Budget Responsibility—that is, at the time of the autumn statement.
	The last change that I want to explain is the change that the Government are making to the tax charges on pensions when someone dies. We will table amendments in due course to enact those changes in detail, but the Bill currently provides for certain lump sums to be paid from pension schemes when someone dies under the age of 75. It ensures that when someone dies with money in a drawdown account before reaching the age of 75 and a lump sum is paid from it, that sum can be paid tax-free. It also ensures that if someone dies with a pension after reaching the age of 75, the tax charge on a lump sum paid from it is reduced from 55% to 45%, and it reduces the tax charge when someone over 75 receives a serious ill-health lump sum to 45%.
	The Bill makes a number of other changes, which I will summarise briefly. They include the introduction of a permissive statutory override, which will allow schemes to make the types of payments set out in this Bill without the need to change their scheme rules; provisions to ensure that the new system is reflected in the rules governing overseas schemes involving UK tax-relieved funds; allowing payments from guaranteed annuities to be paid to beneficiaries as a lump sum if they are under £30,000; and measures to ensure that people cannot gain an unintended tax advantage by becoming temporarily non-resident.
	Our pension reforms have been extensive and fundamental. We have taken steps to provide a solid foundation for private saving by reforming the state support that is on offer and introducing automatic enrolment. However, it is also vital to give people an informed choice, and the Bill introduces welcome changes to ensure that that happens. It makes the tax system fairer by ensuring that people have more choice in regard to how they access their savings, while also preventing people from exploiting the new flexibility in order to gain unintended tax advantages. At the heart of it are three key principles: responsibility, fairness, and individual choice. I commend it to the House.

Cathy Jamieson: I look forward to an interesting debate on the detail of the Bill, both today and in Committee.
	Opening the debate on Second Reading of the Pension Schemes Bill, the Minister for Pensions said:
	“we will be very busy over the remaining months…taking the pensions system to a…better place.”—[Official Report, 2 September 2014; Vol. 585, c. 195.]
	I agree with the first part of that statement: we will indeed be very busy. As for the second part, the extent to which we can improve the Bill remains to be seen. The efficacy of any Bill should be judged only according to its outcomes, and at this stage there are a number of concerns about the outcomes of this Bill, which are far from certain. There are a number of unanswered questions.
	My hon. Friends have asked a number of them today, and I am sure that more will arise during the Bill’s passage.
	As the Institute for Fiscal Studies said at the time of the Budget, the reforms in the Bill will change the pensions landscape dramatically, in the ways in which people take income in retirement and the pensions industry is structured. As the Minister has explained, from 6 April 2015 those aged 55 and older—I should perhaps declare an interest, as I am a member of that age group—will be granted far more freedom. They will be able to gain access to as much of their pension savings as they wish, as often as they wish.
	The Minister for Pensions has described the Opposition’s view of the new freedom as “ambivalent”, but that is something of a misrepresentation. We are not ambivalent about what the Bill purports to achieve. Since the reforms were announced in the Budget statement, our position has been consistent, but, for the avoidance of doubt, I shall restate it. We support increased flexibility and choice for savers, which is why we have long advocated reform of the annuities market to help people shop around to get a better deal. However, it would be remiss of us not to identify and highlight the potential problems and pitfalls that the Bill presents. One of my main concerns, which has already been raised today, relates not just to what it seeks to achieve, but to the speed at which it seeks to achieve it.

Sammy Wilson: Does the shadow Minister agree that, given the increasing array of choices now available, one of the most important decisions anyone can make will be how comfortably can they live in retirement? The guidance and help the Government provide on making these difficult choices is very poor.

Cathy Jamieson: The hon. Gentleman makes a very important point which I will deal with in some detail. It is one of the most crucial issues not just in respect of the Bill, but of the wider pensions landscape.

Anne Begg: There is confusion as to what the proposals will mean in practice because there has been not been the discussion across the political spectrum and among social partners that took place for the accumulation stage—making sure that more people save for their retirement. There has been little if any discussion about the decumulation stage, beyond criticising annuities. That is part of the problem with this process: the Government pulled a rabbit out of a hat at the Budget, without building a broad consensus to ensure that everybody is on board.

Cathy Jamieson: My hon. Friend makes a valuable point which I will address in due course. Before I do so, I want to put on the record one of the concerns expressed by the TUC, which, in keeping with the point made by my hon. Friend, said that it believes that
	“the measures contained in the Bill are being rushed in, thus overturning the emphasis on consensus and consultation that has been a positive feature of pensions policy making over the last decade.”

Sheila Gilmore: Is my hon. Friend concerned that, given the speed of these changes, some of the other longer-term reforms such as auto-enrolment may be impacted on? Is she worried that these issues might not have been properly looked at?

Cathy Jamieson: There are two pension Bills running side by side in the House and I do not want to stray into discussing the detail of the other one which is being considered in Committee—I am sure you would not allow me to do so, Mr Deputy Speaker. However, my hon. Friend makes a valuable point.

Lady Hermon: The hon. Lady is being very generous in taking a number of interventions. She has the opportunity to confirm that the Labour party would support an amendment to the Bill to make it a specific criminal offence for unscrupulous, so-called pensions advisers to swindle innocent people out of their pensions and lifetime savings. Is that not a valuable amendment that could easily be made and confirmed by the Financial Secretary this afternoon?

Cathy Jamieson: The hon. Lady makes an important point, and I listened carefully to her intervention on the Financial Secretary. As a constituency MP, I am aware of people who have been swindled out of their life savings through unregulated, unscrupulous people giving them bad advice; indeed, the Financial Secretary has heard me talk about this issue when considering other Bills. I am very interested in what the hon. Lady said about such an amendment, which we would want to consider to give as much protection as possible to consumers.

Sammy Wilson: A point that the Financial Secretary skirted round when he announced the changes to annuities was that they can now go down, as well as up, as a result of this legislation. Does that not bear out the concern raised by the hon. Member for North Down (Lady Hermon)? If such flexibility is provided for the providers, there is a real danger that people could be sold a pup and find that their income unexpectedly diminishes over time?

Cathy Jamieson: That is an important point, and these are exactly the reasons why it might have been useful if more time had been provided for discussion within the industry and with the partners in the process, so that we can get to that better place that I talked about at the outset. It is not just about giving people more choice; it is about giving them the ability to make choices that are wise not only at the moment when they choose to draw down or take part of the lump sum, but that are based on providing for the future.
	One of our concerns is that although the reforms may well give greater choice, we have to consider whether that greater choice translates into better value and a better deal for those involved in the process. People making use of the flexibility will of course have new opportunities, but as we have heard, new opportunities potentially bring new risks. Those who purchase the wrong products, invest unwisely or fall victim to unscrupulous practices in the unregulated market will see their money swiftly evaporate. Those who use the new flexibility to take out cash from their pension savings may find that they are paying a higher rate of tax. We can also expect a deluge of new products to flood the market, and while some of them may well be good, by the very nature of things, some may well be less so. That is why it is important that people get good-quality guidance to help them make the right choice.

Debbie Abrahams: Is my hon. Friend concerned about the question of the capacity to deliver the advice that the guidance guarantee is meant to supply? According to evidence that the Pension Schemes Bill Committee took last week, the figure is less than 25%. It is not just that poor advice might be given; there may be none at all.

Cathy Jamieson: My hon. Friend makes an important point, and I read with interest the transcript of the Committee’s evidence session. People need good-quality guidance to help them make the right choices. We must guard against mis-selling, for example—we cannot afford a repeat of the payment protection insurance scandal. We must prevent people from falling victim to exploitation and illegality. We know that pension liberation fraud has already endangered millions of pounds in savings, affecting many people. That is the reason why I am concerned about the way the Government have handled these reforms, which to some seem a bit rushed and haphazard.

Barbara Keeley: Is there not also the concern that people will end up spending a lot more of the pensions they have drawn down into savings accounts on social care? This Government have forcibly removed £4 billion from adult social care budgets, so we know that people are paying more for social care. If the money is held just in savings accounts, many more people will end up being liable for those costs.

Cathy Jamieson: The point my hon. Friend makes is absolutely crucial for many people, which it is why it is so important that they get guidance, so they can make sensible decisions to provide for the long term. I will say a bit more about social care and other services later, if I have the opportunity to do so.
	After the Chancellor announced the overall pensions reforms to the House in the Budget statement, we set out three tests against which we believe they should be measured. The first was the advice test: would there be robust advice for people on providing for their retirement and measures to prevent mis-selling? The second was the fairness test: that the new system would be fair, with those on middle and low incomes still being able to access the products that give them the certainty in retirement that they want. The third was the cost test: that the Government must ensure that these reforms do not result in extra costs to the state, either through social care or pensioners falling back at a later stage on means-tested benefits such as housing benefit. We stand by those tests and would argue that so far, the Government have been unable to give assurances on any of those points.

Andrew Love: Is my hon. Friend aware of a study carried out by Ipsos MORI which showed that 12% of those who were eligible to do so would withdraw their pension pot entirely next year? When asked what they would do with it, one in five suggested that they would use at least part of it for a holiday.

Cathy Jamieson: Yes, I am indeed aware of that report. I shall go on to raise similar concerns and seek answers from the Minister to them in due course.
	In addition to setting the three tests, we have also commissioned a retirement income taskforce, chaired by Professor David Blake of the pensions institute at the Cass business school. We wanted to look at how we could enhance retirement income and ensure that savers had access to good-value products alongside the support that they needed.
	I would argue that our position on pensions has been consistent ever since our time in government. When the Labour Government took office in 1997, there was a crisis of pensioner poverty resulting from a decline in the value of the state pension under the Conservatives. There was also a crisis of trust in private pension provision following the mis-selling scandals that previous reforms had opened the way to. Responding to those challenges, the Labour Government built a robust regulatory framework to police and protect people’s pensions. That framework included the Pension Protection Fund. We also laid the groundwork for the universal state pension with a triple lock guarantee, and established the National Employment Savings Trust to help people to save for their retirement.
	The reason that I mention those reforms is that none of them was rushed through. They were all based on sound evidence and consultation, and they had the common aim of helping people to make the right choices while affording them the certainty and security in retirement that they deserved. We now have to consider whether the present Government’s approach to pension reform has been consistent, or whether it seems at times to be erratic and contradictory.
	To be fair, things began well for this Government. The single-tier pension and the auto-enrolment legislation represented positive steps to build on the progress made by the previous Government. Those reforms were based on evidence, consultation and consensus. That was acknowledged by, among others, Otto Thoresen, the director-general of the Association of British Insurers, who said that
	“good consultation and a good period to execute”
	improved the chances of legislation being successful.
	However, the Government’s approach to the latest pension reforms, announced in the Budget statement, appears disjointed. Prior to announcing the reforms, they did not consult, either consumers or the industry. This has resulted in some of the issues that have been raised today not being flagged up at that time, and in the Government’s argument losing some of its intellectual rigour.
	I would like to draw the House’s attention to the comments of the shadow Minister for Pensions, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East on Second Reading of the Pension Schemes Bill, in which he highlighted the discord between the Government’s stance on pensions in the accumulation and retirement phases. That has been commented on today as well. In the accumulation phase, the Government’s approach—one that the Labour Government had fostered—is founded on the recognition that the pensions landscape is complex and difficult to navigate. That approach harnesses inertia to encourage pension savings, with individuals employed without pension schemes being placed on them by default. That is a sensible approach and it has proved effective.
	However, the Government’s approach to the retirement stage, as outlined in the latest reforms, departs from that model, shifting the emphasis from the importance of accumulation to the ease of access. This Bill places the onus of choice back on the individual, working on the assumption that they will be able successfully to navigate what my hon. Friend the shadow Pensions Minister has called the “jungle of financial products”. He referred to there being a “tension” between the two approaches. He has been a friend of mine for many years, and I think that that is typical of his diplomatic way of expressing himself. The Association of British Insurers has also noted that tension, observing that:
	“Automatic enrolment has seen millions more people saving for their retirement and further pension reforms should build on this. We are very concerned that the focus of recent discussion around the Freedom and Choice reforms is on early access to cash at age 55 rather than on building assets for income in retirement.”
	The Minister referred to the fact that the Bill introduces the option of taking uncrystallised funds pension lump sums. I have to say that I have not been able to think of a better acronym than the one he came up with, try as I might. As he said, that provision will allow people to withdraw money directly from their pensions without first designating it for drawdown. Individuals will be able to take 75% of each withdrawal tax free, with the rest taxed at the marginal rate. This has been described by some as allowing people to use their pension almost like a bank account. More than any other measure in this Bill, it will expedite people’s access to their pension.
	I should like to probe the Government’s thinking on this point a bit further. In searching for greater clarity, I repeat the question that my hon. Friend the shadow Minister put to the Pensions Minister in the earlier debate. He asked:
	“If auto-enrolment policy was correct to assume that individuals need to be guided, helped and encouraged into better pension decisions, why do we no longer think that is the case at retirement?”—[Official Report, 2 September 2014; Vol. 585, c. 206.]
	Perhaps the Minister will be able to respond to that question when he sums up the debate today.
	In the meantime, I think we all agree that the Bill will increase innovation and result in a raft of new pension products entering the market. In many ways, that would be a good thing but, as I have said before, the flipside to freedom and choice is risk and complexity.

David Gauke: As ever, the hon. Lady is making a thoughtful and probing speech. It would be fair to say, however, that her tone is not one of great enthusiasm for greater flexibility and choice in the pensions system. Will she tell the House whether her party is considering reversing the changes that we are introducing today?

Cathy Jamieson: I am surprised by the Minister’s comment. I see it as my duty and responsibility as the shadow Minister to make thoughtful and probing speeches. I also said at the outset that we welcomed the opportunities that increased flexibility would bring, but people need to understand that the flipside to that freedom and choice will be risk and complexity. This is the place in which we should debate that, as we discuss the principles behind the Bill. We will also probe the matter further in Committee. The Financial Conduct Authority has observed that firms might devise
	“complex, opaque and overpriced products”
	that do not represent good value for customers. It is incumbent on us to understand that risk, and to ask questions about how such products would be regulated. Furthermore, the marketing of those new products might not always clearly articulate the risks involved.

Andrew Love: Does my hon. Friend acknowledge that we already have experience in this regard, especially with pensions? The personal pensions fiasco took place not long ago, and it is incumbent on Members of Parliament to ensure that we do not go down that road again.

Cathy Jamieson: I agree with my hon. Friend. That fiasco is a recent memory for many of us, and it is our responsibility to ensure that all the risks, as well as all the upsides, are explored.
	I should like to quote the ABI, which has stated:
	“Giving customers more choice is welcome but it is also imperative to recognise that good guidance and advice is vital to prevent people making decisions which could lead to retirement poverty and/or to them giving up valuable benefits.”
	That is a very important point. People in the industry also recognise that we need to have some caution and ensure that we do the right thing.
	That brings me neatly to the fraught issue of the guidance guarantee. The Minister talked a bit about that in responding to interventions, and although I recognise that it is not within the specific ambit of the Bill, it has a great bearing on it. That guarantee is integral to the measures in the Bill, because if the Bill is to be a success, the guidance must be fit for purpose. It is not unfair to say that the continuing concerns and confusion over the guidance guarantee do not give confidence to people who are worried about how they are going to access the guidance. It seems as though the guidance was a secondary consideration. As I have said, the pension reforms were announced without the prior consultation with the industry that we might have expected. Some of the confusion was added to when the Chancellor stated that his reforms would be accompanied by advice, given that we know that what he really meant to say, and what was promised in the Budget, was unregulated guidance.
	We then had the unedifying and unhelpful intervention by the Pensions Minister, who appeared to make light of the need for guidance by saying:
	“If people…get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice.”
	That is not helpful at all and has not been during the process. On Second Reading of the Pension Schemes Bill, the hon. Member for Reigate (Crispin Blunt), who is in his place, asked for clarification on how the guidance guarantee would be funded. The Pensions Minister answered by saying that
	“the £20 million is not an estimate of the annual recurring cost of providing guidance; it is a one-off seedcorn, getting-the-thing-going fund…if we need to set up websites, produce literature and create infrastructure, the £20 million will enable us to do so.”—[Official Report, 2 September 2014; Vol. 585, c. 198-99.]
	That is a bit vague and non-specific. Less than a year from when this Bill comes into force, surely he should know exactly what the guidance will look like.
	We now know that the Government propose to deliver the guidance across three platforms, only one of which will be face to-face guidance—that was what was initially
	promised. We also know that the Money Advice Service will not be involved in the delivery. The three agencies involved will be: the Pensions Advisory Service, which will provide over-the-phone guidance; Citizens Advice, providing face-to-face guidance; and gov.uk, to which this Minister referred. That raises the question of how the Government will ensure that guidance delivered across three different mediums will be of a consistent standard.
	The crux of the matter, and what the consumer needs to understand, is: what will the guidance consist of? Will it be an interactive exchange, or will it be a list of questions that must be asked and areas that must be covered? The Financial Conduct Authority appears to think it will be the former, saying it should cover:
	“the key facts and consequences of each”—
	option—
	including financial consequences, e.g. tax implications.”
	The Pensions Minister, however, seems to think it will be the latter. He has said that there is a “world of difference” between
	“a guidance conversation to get people to base camp”
	and a
	“sophisticated, individualised, tailored piece of…financial advice recommending products.”
	The Pensions Minister has, however, been keen to assure us that the guidance is not being offered on the cheap—his preferred epithet is “budget”. The levy on the pensions industry will not be set at the level required to pay for
	“full-blown, regulated, independent, tailored financial advice.”—[Official Report, 2 September 2014; Vol. 585, c. 199.]
	Rather, it will be designed to generate only so much as is required to pay for what he terms the “cost-efficient” guidance version. To summarise, the guidance guarantee seems to amount to the following: it will not be regulated, personalised, or product-specific; it will be “cost efficient”, “substantially cheaper” than advice and funded by a “modest” levy on the industry—enough to get people to “base camp.”
	That was what was said almost two months ago, but, sadly, judging by the evidence given to the Pension Schemes Bill Committee, things have not progressed much since. So bereft has been the Government’s approach to information gathering and analysis that we still do not know how many people are likely to take advantage of the new flexibilities. In evidence to the Work and Pensions Committee in April, the Pensions Minister was unable to give any firm indication. He said:
	“I am not sure there is much point in me guessing. As I say, HMRC assumed that about 30% would take the cash...some of the annuity providers are saying it might be 70%- odd. We do not know.”
	We are also reduced to guessing because, despite a freedom of information request from the shadow Pensions Minister, the Government have refused to publish any analysis they have conducted of the behavioural impact of these reforms. We do not know how many people are likely to make use of the new guidance, but a guidance pilot conducted by Legal & General found that only 2.5% of those offered guidance accepted it. The Pensions Advisory Service has estimated that take-up in the first year will be about 25%, so what happens in respect of the 75% who do not take the guidance? .What backstop measures, or second line of defence, will be in place will
	be in place for those who do not take up the offer of guidance? In the first year at least, the answer appears that there will be none at all.
	Again, the FCA has raised concerns about that, saying,
	“we will have the usual supervisory work going on keeping a very close eye on products as they develop. If people choose not to take the guidance, they choose not to take the guidance.”
	That means that, potentially, up to 75% of people using the flexibility in the first year will access their pensions and use the money without taking any guidance at all. I do not know whether the Minister finds that concerning, but I do, and I am not the only one. Just Retirement has described the lack of a backstop as
	“a massive threat to the pensions freedom reforms.”
	The need to install a second line of defence was endorsed by others within the pensions industry, including the ABI, which also expressed doubt about the rigour of the FCA’s consultation on guidance.
	The ABI’s head of policy said:
	“We have discussed it with our members. We are a little concerned the FCA consultation…was narrowly drawn, which is understandable because it didn’t have much time.”
	Why did it not have much time? Is it because the Government are in such a terrific hurry to force these reforms through? We are being left in a situation where the first tranche of people taking advantage of these reforms could be seen to be the guinea pigs in this process, and that is not acceptable.
	Let me deal with a point that my colleague raised about the Ipsos MORI research. The extent of the concern has been laid bare by that, because it found that up to 200,000 pension investors could take advantage of the new flexibility in the first year alone. It is estimated that that would generate an additional £1.6 billion of pension income for Treasury coffers, which is why I was asking the Minister what estimate he had made as to what the Treasury would receive. It might be seen as good news for the Treasury, but perhaps not as such great news for savers, because only 38% of these pension investors were able to state accurately how much tax would be deducted from a medium-sized pot and only 6% could accurately predict what rate of tax would be applied to large pension pots.

Sammy Wilson: I know that the shadow spokesperson is not as cynical as I would be about some of this, but does she accept that HMRC’s own figures indicate that over the next budget period there will be a £4 billion windfall to the Treasury as a result of these changes? Of course, in the much longer term tax revenues will fall because there will be less income from the tax on annuities.

Cathy Jamieson: I would never suggest that the hon. Gentleman is cynical. He raises an important point, which again shows why I was trying to press the Minister on some of that.
	I realise that I have taken up a considerable amount of time, and I want to give opportunities for other hon. Members to speak. However, I wish to raise just one other issue as I draw to a conclusion. I have mentioned the areas of uncertainty about the guidance versus
	advice debate, but I ask the Minister also to comment on the announcement about the abolition of the 55% tax on pensions at death—the so-called “death tax announcement”—made at the conference recently. I think that, at the time, the Minister said that annuities would not benefit from the tax cut. But it was certainly my understanding—the Minister can correct me if I have misunderstood—that the so-called value protected annuities will certainly so benefit, and that is still on the Treasury website. I have written to the Chancellor to ask for information, but I have not yet had a response. Clearly, uncertainty remains over the added potential for tax avoidance, which has been produced by the Bill.
	In order to deter avoidance, the Government have introduced money purchase annual allowance rules, which, as the Minister said, places a £10,000 limit on the annual amount that can be saved tax free through money purchase agreements. The intention is to ensure that individuals do not use the new flexibilities to avoid tax on their current earnings. However, the rules still allow for £2,500 a year of salary to be “washed” tax free through salary sacrifice arrangements. I am interested to hear what the Government have done to address that risk and what further action they plan to take to guard against the new flexibilities being used in such a way.

Andrew Love: When it was suggested to the Pension Schemes Bill Committee that there would be ways in which people, especially those over the age of 55, could use the new flexibilities to avoid taxation, the Minister did not seem to be at all concerned. Is the shadow Minister concerned, and will it be an issue for the Bill?

Cathy Jamieson: Yes, the shadow Minister is concerned as, I am sure, are the Ministers on the Front Bench, who will have to say something in response as they wind up the debate this afternoon. It is a matter that we will have to explore further in the Bill.
	In conclusion, we are serious about getting pension reform right. We want people to have the freedom to choose the retirement product that works for them, and we want them to have good products from which to choose. It would have been better if the Government had consulted further on the reforms and conducted a full and thorough analysis of all the tax implications before they announced the Bill. None the less, we still have the opportunity to look at the Bill in greater detail and on that basis we will not be opposing it today.

Crispin Blunt: I am obliged to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) for her reference to my intervention on Second Reading of the Pensions Schemes Bill. Much of her speech was about the guidance, which is covered in that Bill. Obviously, there is a significant amount of overlap between the two pension Bills.
	I represent four of the most significant players in the United Kingdom pensions market: Just Retirement, Legal & General, Partnership, and Fidelity, all of which provide a significant proportion of the jobs in my constituency. As specialist annuity providers, Partnership and Just Retirement have grown like Topsy over the past decade. They are creative and entrepreneurial companies that have found ways of providing different classes of annuitants with significantly enhanced value.
	The changes that the Bill introduces and that were announced in the Budget caught the whole market by surprise and have led to a particularly challenging six months for these two companies. Understandably, as more options will soon be available, there has been a significant reduction in the number of people buying annuities. Consumers and financial advisers are continuing to assess the best options for individuals as these reforms are developed.
	Despite this difficult time, the very reasons that allowed those two companies to succeed so spectacularly over the past decade are the same as those that are enabling them to weather this sudden strategic change in the operating environment. The companies are well-led and fleet-footed and are now in the business of identifying new products to meet the new environment. However, they deserve certainty about the regulatory framework as soon as reasonably practicable so that they can bring new products to the market as soon as possible.
	The Budget announcements made earlier this year were the culmination of a drive by both coalition partners towards greater consumer autonomy in the pensions market. For anyone who believes in freedom and responsibility, such a reform can only be right. The paternalistic status quo has long been out of step with a society that is happy with financial self-determination before retirement. Moreover, with annuity rates having dropped significantly over the past two decades, diversification, many hope, may be just what the market needs to invigorate it and produce the most innovative and well-suited options for consumers.
	However, the pensions market has long been distorted by a deficit of consumer awareness. The 2012 survey of the Department for Work and Pensions, “Attitudes to Pensions”, found that 49% had no knowledge of the need to annuitise. Financial self-determination is an honourable and desirable goal, but the transition may be very bumpy if people purchasing pension products are unable to approach the open market with the requisite knowledge to plan for their retirement.
	The Financial Conduct Authority, in its consultation “CP14/11: Retirement reforms and the guidance guarantee”, has identified that people who make large withdrawals from their defined contribution pension savings are at risk of not understanding the income tax implications of their decisions. Unsurprisingly, most people will be completely unaware that their tax may not be settled until a year after they have accessed their funds through a self-assessment process. There are a number of other equally important decisions that people must make, and if, through inertia or misunderstanding, they make a poor decision, it will be to their and their family’s material and financial detriment.
	During the evidence presented to the Pensions Schemes Public Bill Committee last week, a number of experts called on the Financial Conduct Authority to use its existing powers to mandate those firms that hold people’s pensions savings to be required actively to engage with their customers who do not take up the Government’s guidance guarantee and to ask a small number of questions that would prompt them to consider the choices they are making. Hopefully, that will avoid the most common errors that have led to poor consumer outcomes. With current estimates of the guidance uptake veering from 4% to 92%, a range of basic security questions will be a necessity, not a luxury.
	The Pensions Schemes Bill will have a major impact on the successful outcome of this legislation and vice versa. These reforms could provide an unhappy example of the costs of liberalisation if consumers are not aware of the freedoms that they now have.

Andrew Love: There is a lot of debate in the Committee and on the Floor of the House today about a second line of defence. Would it not be appropriate that when an individual approaches a pension company and asks to take out either some or all of their pension pot, they are asked whether they have received the guidance guarantee? If they have not, they should be referred back to the guarantee before they take an irrevocable decision on their pension.

Crispin Blunt: The hon. Gentleman tempts me down the path of discussing what is in the Pension Schemes Bill, which, although not the subject of today’s debate, is closely linked with the Taxation of Pensions Bill. I presume by his presence that he is on the Committee, as is the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). I sincerely hope that the Committee will carefully examine this matter. It is subject to a current consultation by the FCA, to which I have submitted my evidence. This is an immensely important issue. To make the reforms in the Bill successful, we have to make a success of the guidance. We will not get it right first time. It will have to be capable of being improved in the light of experience, so that we do not end up with a mis-selling disaster or simply consumers not being informed enough to make appropriate choices.
	We are giving people freedom, and with freedom comes responsibility. Sadly, that means that some people will make poor choices. The hon. Member for Edmonton (Mr Love) has spoken about people making poor choices, or taking a holiday; at least, that was the implication behind his remarks. I think taking a holiday is probably a thoroughly good choice, but he and I may differ. His Scottish Presbyterian background may be coming into play there. I will leave that as speculation.

Ian Swales: The hon. Gentleman raised a point that I had not thought about, which is the tax consequences during payment. Normal annuities are paid out against a pre-determined tax code, and people have their tax deducted at source when they receive their payments. I know this from personal experience. Under the flexible rules, he suggests that the tax will be payable only at the time of self-assessment, much later. Does he believe that providers of these products should be looking at tax deductions at source?

Crispin Blunt: I would concede that this is not an area on which I feel a total authority. Hon. Members who have served on the Pension Schemes Bill Committee and made themselves authorities in this area must also take seriously the advice of experts and industry to address precisely the kind of question that my hon. Friend raises. We cannot afford to leave consumers adrift while we make the transition from a highly regulated, paternalistic and rather depressingly inefficient market to one that provides much better returns and is much more competitive, but which needs better informed consumers to drive it.

Chris Evans: Having worked in the industry myself, I share many of the hon. Gentleman’s frustrations. Does he believe that half an hour of independent guidance is enough for people on the journey of managing a pension pot that has to last them 30 years? How does he see that relationship developing so that they make the right decisions along that 30-year journey?

Crispin Blunt: Obviously, the precise mechanism that ends up being set up by the FCA is immensely important. If it is as the hon. Gentleman characterises, and it does not lead people to come to a proper assessment of their situation, we will be left where we are now. Companies such as Partnership and Just Retirement, operating in the annuities industry, have been brilliantly successful because when people examine their situation it usually makes sense for them to move to such companies when they annuitise, rather than stay with their existing provider. The only problem is that people have been subject to consumer inertia and have not been aware that at that point they should be making the decision in the current market. The great thing about this liberalising reform, and the anxiety shared across the House to make sure that the guidance works, is that we will now be waking people up to the opportunities presented to them. If we have many tens of thousands of pounds in our retirement fund, a half-hour chat is probably insufficient. Many people will have hundreds of thousands of pounds available to them after a lifetime of saving into a pension fund, and it will pay them to take serious, proper, independent advice. They will need to pay for that, but it will represent serious value for money if they get proper advice. If the guidance can push people in that direction, to properly regulated and properly informed independent financial advisers, we will have properly informed consumers making proper choices.
	The Financial Secretary and the Treasury will need to assure themselves that the FCA is alert to the needs of all consumers with direct-contribution pension benefits ahead of April 2015, and ensure that their delivery is closely monitored as these important reforms are made. As I said, we will not get this right first time, and whatever system is set up will need the capacity to improve as we learn how to improve the capacity of consumers to take informed decisions.
	Additionally, the companies in my constituency continue to be concerned that the regulatory rules affecting a number of key changes in the Bill are still not clear. The Association of British Insurers is discussing these points with the Government and the FCA, but without clarity soon there is a risk of some customers not being able to access flexibility and there could be an uncertain environment and an uneven playing field between different types of product and providers. This is not solely the role of the FCA. It requires coherent and achievable measures from the Treasury, Her Majesty’s Revenue and Customs, the Department for Work and Pensions, the FCA and the Pensions Regulator.
	For instance, the regulatory position on accessing a pension pot in one lump sum, whether through flexi-access drawdown, or an uncrystallised funds pension lump sum—I am grateful to the Financial Secretary for UFPLS. I had a go at “golden annuity uncrystallised kapital enhancement” fund, a GAUKE, which would rely on “capital” being spelled as in “Das Kapital”, which may
	mean it loses some of its attraction, but I guess we will have to settle for UFPLS. I am sorry that the imagination of Her Majesty’s Treasury officials was not able to produce a real GAUKE for him, to leave his impact on these highly important, liberalising measures for all time.
	To return to the substantive point, the regulatory position around those two funds remains unclear, making it very difficult for providers to plan and develop requisite systems. This is despite taking a pension pot in this way being a key expectation raised as a result of the Budget reforms. Indeed, the whole regulatory regime around the uncrystallised funds pension lump sum route, which forms the basis of the Government’s pension bank account analogy, has yet to be resolved. In addition, there could be gaps in regulation between contract-based and trust-based schemes in two areas: how drawdown in trust-based schemes will be regulated, as well as protection for customers and expectations of providers if a customer wants to transfer out of a defined-benefit scheme after receiving advice not to do so.
	My constituents welcomed the sensible reduction of the 55% tax charge on death, which the ABI had previously asked the Government to consider, which overtly conflicted with the wider Government policy of making pension saving more popular by giving people more options on how to use their retirement savings. However, without further clarification it creates an advantage for drawdown customers over annuity customers, which will change behaviour. To ensure that the policy is not skewed against income, tax on pension payments to a beneficiary after the customer’s death must be treated equally, whether paid through an annuity or drawdown, as income or as a lump sum.
	I want to use the occasion of the Second Reading of this rather technical Bill, which in concert with the Pension Schemes Bill is a profoundly liberalising measure, to draw attention to other associated reforms that are interdependent. Our country has an obsession with investing in property, and there are vast reserves of wealth tied up in household equity. We face a growing crisis in our ability to provide decently for a rapidly growing older population. Failure to enable the equity release industry to grow in a competitive way to produce value-for-money products that look after the interests of the elderly and their families, rather than those of the estate agency industry, when we force people to realise their assets by expensively selling their homes when they do not need to do so and when they deserve stability in their lives with regard to their homes, will be critical to the well-being of every family in this country.
	Last year, I led a delegation from the European equity release industry to lobby the European Parliament, the European Commission and the Council of Ministers, to seek changes in the trialogue stage of Solvency II to protect this industry. Under the leadership of my right hon. Friend the Member for Tunbridge Wells (Greg Clark), then the Paymaster General, the British team in Brussels helped to secure some useful space in the interpreting recitals to Solvency II that would help to ensure that the capitalisation demands placed on the equity release industry are significantly in the hands of national regulators. That is immensely important to this Bill, because the successful advance of the equity release industry and the successful development of freedom
	around pension provision go hand in hand. That relies on a sensible interpretation of the European Union’s Solvency II regime.
	I am profoundly concerned that the hard-won space to enable the British equity release industry to advance, achieved by Ministers and their officials, alongside work done by the Equity Release Council, under the chairmanship of our former colleague Nigel Waterson, will, in the classic tradition of British gold-plating of European regulations and directives, be entirely undone by the implementation and regulation imposed by the FCA.
	The Economic Secretary has assured me that the FCA is under thoroughly sensible and business-like leadership, and I believe that is the case, not least because last night I met the splendid Robert Taylor, who earlier this year became an excellent addition to the FCA’s senior leadership team. However, I have to say to the Financial Secretary that there are regrettable early signs, as the policy is being developed, that the overriding need to advance the equity release industry to support the reforms being implemented in the Bill, and unrealistic proposals around the matching adjustment that would apply to property as an asset, could seriously hamper the necessary growth of that industry.
	If the FCA persists in its unnecessary programme of gold-plating, it will be all of us who have to pick up the bill, and it will be a profound missed opportunity for the United Kingdom, and not only for our citizens; it will be a missed opportunity for the industry to advance around the world, as many of our financial services industries have done, to the immense benefit of the people of the United Kingdom.
	I joined the overwhelming tide of opinion that identified that measure as one of the most profound and welcome changes being made by this Administration. The Chancellor of the Exchequer is rightly winning the admiration of his fellow Finance Ministers for the remarkable transformation of the British economy under his leadership. That measure will be a profound part of his and his Treasury colleagues’ legacy. It remains up to them to ensure that it is delivered effectively in detail so that it can be an unalloyed adornment to their golden record.

Tom Blenkinsop: As has been mentioned, I am a member of the Pension Schemes Bill Committee, as are a number of colleagues who are present today. We are here to find out about the technical elements that will affect that Bill, because some taxation issues have been brought to our attention during the Committee’s evidence sessions. I want to refer to the evidence given by Mr John Greenwood, who is editor of Corporate Adviser magazine—it is given out to pension professionals—author of the “Financial Times Guide to Pensions and Wealth in Retirement” and a freelance journalist for national newspapers.
	The issue emerged between May and July this year and concerns how individuals can avoid national insurance contributions by using the Government’s newly announced scheme to divert their income through a pension fund, rather than receiving it in a traditional salary. I will dip in and out of the evidence Mr Greenwood gave during the Committee’s fourth sitting, on Thursday 23 October,
	because I think that it is pertinent to the Pension Schemes Bill Committee’s considerations and to the debate on the Taxation of Pensions Bill, both here and in Committee. Mr Greenwood, elaborating on his concerns, told the Pension Schemes Bill Committee:
	“The new easy access rules create a huge risk of widespread tax avoidance. If everyone over 55 takes full advantage of them, the Treasury could lose £20 billion in 2015-16—obviously, that is a massive number. That will not happen, but if even a tenth of people do, that is still a £2 billion loss. That seems to make quite a hole in the Treasury’s optimistic projection of making £3 billion of profit out of the policy over the five years of the next Parliament.”––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 117, Q249.]
	The Financial Secretary said earlier that the Treasury had not yet given a forecast of how much it expects to make or lose on this policy, but we already know from Mr Greenwood’s inquiries that the Treasury had initially estimated a £3 billion profit. I think that is pertinent to today’s debate, because it is about the tax implications of the legislation and how they will affect the autumn statement, the Budget and what a future Government will be able to plan for with regard to incomings and outgoings.
	Mr Greenwood went on to say:
	“In layman’s terms, the Government’s position is that you can take your money as cash from 55. If you are an employee, you have two options. You could be paid into your current account through salary, which is taxed at 13.8% employer national insurance on everything over about £8,000 and the employee pays national insurance of 12% on everything above that figure, and then everything is taxed above the nil rate band. Obviously, you have to be paid the minimum wage of £11,500-ish, but above that, why would you be paid through your salary when you can pay into a pension and take it all out the next day? For payments into a pension, there is no employer or employee NI at all, and only three quarters of it is subject to income tax. The Bill effectively gives everyone over 55 a £10,000 NI-free allowance—four times that in the first year, if they draw their money early.
	When the penny drops, people will suddenly realise how much loss there is there. If you are on £40,000 and you maximise this—there are currently no rules to say you cannot do this—the loss to the Treasury is 62% of the revenue they would have got from that person’s employment. That is quite a chunky amount. It is clear from the Budget documents that the Treasury had not spotted this, because if you look at the documents published alongside, and the risk assessment, there was no mention of national insurance at all. They have moved with a reduced annual allowance of £10,000 for those who take benefits early, which reduces it but does not stop it altogether.”––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 117, Q250.]
	I raised that point earlier with the Financial Secretary and asked whether he could tell me what percentage of people the £10,000 threshold would affect. He did not give me a response, so I told him that Mr Greenwood valued it at about 2% of the population, so 98% of the population would be exempted. The Financial Secretary responded that that was Mr Greenwood’s suggestion, but Mr Greenwood was actually referring to a response from the Treasury. That is deeply worrying, because we do not know the implications of the policy.
	What we do know is that the Treasury’s policy at the moment is not to respond to Mr Greenwood, because he has written to the Treasury six or seven times without receiving a response. I understand that he has written to the Office for Budget Responsibility once to request a forecast but, as of last Thursday, has not yet received a reply—he might have had a phone call by now. I do not
	know about other colleagues in the Chamber, but I find that profoundly worrying, if we are potentially losing a considerable amount of money from the Treasury’s coffers—potentially £2 billion to £3 billion, if it is just 10%.

Andrew Love: The most deeply worrying thing about the evidence presented to the Committee was the attitude of the Pensions Minister, who did not seem to think that there was a problem. Will my hon. Friend confirm that he spoke lightly about the potential consequences of this loophole?

Tom Blenkinsop: I thank my hon. Friend, who, as a fellow member of the Committee, attended those evidence sessions. The Pensions Minister confirmed that people can already use this tax scheme—there is no legislation to stop them doing so. The only difference is that the industry is gearing up for next April, and getting the HR processes in place, so that it can give people advice all at once, rather than employer by employer. Mr Greenwood said that he has talked with several people in the industry and that one company had already talked with 192 employers that are looking at that.
	The ability to avoid NI in that way already exists, and the Government have a threshold of only £10,000 and nothing planned until after July as a response. That gives them a big headache, because the Prime Minister’s £7 billion tax give-away has been blown out of the water due to borrowing fears. Now another £2 billion or £3 billion is missing. That is £10 billion. The Government like to call the Opposition the debt party, but in fact it is they who have doubled the national debt. Now they will considerably increase borrowing because of the very fact that their own figures are out by a minimum of £10 billion.

Nigel Mills: I speak as a member of the Pension Schemes Bill Committee; for me, this has been a week of complicated pension rules.
	I welcome the freedoms that the Taxation of Pensions Bill provides. We want people to save for pensions to provide for their own retirements; it has to be right to give them the freedom to use the money they have saved as they want to, without there being penal tax charges that might force their behaviour into certain directions. It is absolutely right for these choices to be added to the whole landscape.
	We should bear the context of the current situation in mind. Basically, we force people with relatively small and medium-sized pension pots to take an annuity. The tragic thing is that in many cases those annuities are not suitable—people are mis-sold them, do not understand them and do not shop around or get the best deal for themselves. People cost themselves large amounts of their retirement money because the market simply does not work in a fair manner.
	The Work and Pensions Committee and others have been trying to find various ways in which to reform the annuity market, to make it fairer and make it work better for people—to encourage shopping around, to
	stop mis-selling and to get people to think about whether their life expectancy might be shorter than the average. We need people to think about what will happen if they predecease their spouse. Will the product that they are buying provide for that person?
	Of all the solutions brought forward, the Government’s is by far the most radical. It effectively says, “You don’t need to buy an annuity any more if that is not right for you. You can draw down in a much simpler, cheaper way and try to live off and control the savings that you have produced for yourself.” That sounds a fairer approach. If people have chosen to save money for their retirement, they can now choose how and when they spend that, in a flexible way. We should all want that to be available. That is not to say that that would be right for everyone; it might be entirely wrong for many people. There is absolutely no reason why we should take products away, but we need people to make informed choices about what they want in their retirement—how much income they want, how they want to spend it and over how many years. In that way, they will not be locked into a totally unsuitable situation.
	There are various nightmare scenarios. One is when someone has run out of money—they have drawn down and spent too much. They never thought they would live past 75, but live until they are 93. They run out of money in their later years and do not have the standard of living that they wanted. We absolutely do not want that to happen. The flip side, of course, is that if someone buys an annuity at 66 and dies at 67 and has no protection, they have burned their whole pension pot for them and their family.
	We need to find a way of taking those two extremes out of the situation. We want new products to smooth the situation out. People should be able to say that they want a product that not only guarantees a certain income for life—so they know they can pay the heating and food bills, have the annual holiday and treat the grandchildren—but allows the flexibility to spend money on a cruise or an active lifestyle when they first retire. They might want funding for care costs in their very late life; during the previous years, their income could dip a bit as they would not be so active or have such big bills. How do we get people to understand that they can make those choices? How do we get the products that fit those choices? Those questions are key.
	I entirely agree with the comments made so far: getting people to understand the choices—what they need, want to do and can do—at the point of retirement is the secret, but also probably the hardest bit. That is why we need to get the guidance guarantee to work. I have tabled amendments to the Pension Schemes Bill to try to strengthen how that guidance will work. But we need to be careful: it is not when someone is 65 and a half and about to retire at 66 that they need to understand what is going on. Under the rules as they are today, that might be fine—the person saves into a pension scheme, which will assume that funds will move into an annuity when retirement age comes so plans can be made on the basis that the person will need their pot at 66. Funds can start to de-risk when the person gets to 56 on the central assumption that they will want a safe pot when they retire.
	Once the changes come in, however, people might not want to do anything with their pots at age 66; they might stay in work until they are 70. They may want to
	use other savings or defer their pensions for a while. Do they want their pension scheme by default to start de-risking and reducing investment return 15 years before they want to retire? That would be disastrous for the pension pot.
	Choices will have to be made about which pension scheme to join, about risk profile and about when de-risking should start. People will have to understand that when they are 40 or perhaps 35, not 65 and a half. There needs to be clear guidance to which people can be signposted. Pension funds need to say to people, “You have important choices to make all the way along the process. Here is what you need to know, here is how you can find it and here is what you should be doing.” If people do not get the message earlier, the guidance for those aged 65 and a half might well be, “Here is what you could have won, but sadly you have not won it because you did not do the right things earlier on.” When the guidance providers come in, they need to provide clear, web-based guidance that people can access at any age, rather than being locked out until they are 65 and a half.
	We also need the regulator to think carefully about what pension schemes will do with people who just do not engage. Some people will be enrolled automatically; they do not really understand the system but they do not opt out. They are saving money and get to 55. They are asked whether they want to de-risk, but there is no reply. They get to 65 and are told that they can draw their pensions, but there is still no reply. What should be done with the pension pot in that situation? An annuity will not be bought, so what should the default be? Should there be some kind of drawdown so that the money is left sitting somewhere for a while under some strange investment profile?
	In this landscape, we need to think about a lot of things on behalf of those who have choices to make and a pension pot about which it is worth making choices. I suspect that a sizeable number of people will have relatively small pension pots and that taking the cash, tax-free, will remain their best option. Those who have the pension choices but are not so well off that they can afford expensive advice are the ones who will need to understand the options and try to pick the right ones.
	I am left thinking that guidance is the right answer and advice is the wrong one. The risk with advice is that it is incredibly expensive; it would cost several hundred pounds at best to give people advice. The last thing we want someone who has been auto-enrolled into a pension pot to do is spend a large percentage of their pension on advice that they really do not need, because they do not have enough money to take advice on. We have to try to keep the cost of the guidance scheme low and make it a way of getting people to their first understanding and thought process about what they could do, rather than trying to put in place a gold-plated system that everyone has to pay for, even though most people would not be taken that far forward. We have the right idea, although we probably have a long journey before people have anywhere near the knowledge and understanding that they need, and that we need them to have.

Andrew Love: We have to keep guaranteed guidance at a reasonable cost, but for that guidance to be effective there has to be personalisation to the individual circumstances of the person involved. All the evidence
	suggests that. The one balances against the other. The challenge is to find a way to make the guidance both cheap and effective.

Nigel Mills: The hon. Gentleman has to be right. The issue was raised in the Pension Schemes Bill Committee evidence sessions last week, and we will get to it again when we discuss the provisions on guidance. It is hard to work out the line between advice, which might say, “The best thing for you is to do x,” and guidance, which just says, “Here are the options and the various things to think about. Make sure you shop around. Thanks for calling.” Guidance such as that will not help people, who will forget it by the time they put the phone down or walk out of the meeting room.
	We need the people getting the guidance to have worked out their financial situation—their pension pots, their debts, their other income, their state pensions and other employer provisions—so that when they go to get their guidance, they can set out their circumstances to the person guiding them, and that guidance can be focused on the sorts of choices they could reasonably make. That is probably about as far as we could get, because once someone says, “You should pay off your debts first”, they are getting into giving advice, and that may not always be right; it risks creating liabilities and people being mis-sold things. This will be an extremely hard balance to strike.

Lady Hermon: I apologise for having to leave the Chamber briefly to go to the Select Committee on Northern Ireland Affairs; duty called. I entirely agree that this is a radical and fundamental change to pensions entitlement, as regards when people can benefit from and draw down their pensions. Given that it is such a radical and fundamental change, does the hon. Gentleman share my disappointment that the Bill, which runs to 54 pages, I think, and has three clauses and a schedule, is so highly technical that no ordinary person in the street could possibly understand their pension entitlement?

Nigel Mills: It is certainly interesting that the Bill is 57 pages long and has only three clauses, with the rest dropped into a schedule at the back. However, complicated rules are being changed, to take away some penal tax charges, among other things, and I guess it does not matter how the provisions are drafted; whether they are in a schedule or a clause, we get to the same position in the end. One of the problems with pensions is that everything is so fiendishly complicated that almost nobody can understand what all the rules are.
	I am concerned about the provision in which the Government seem to be repealing the requirement that people must, before buying an annuity, have had a chance to check the open market situation. Clearly, we are not taking away the chance for people to compare annuity rates, because we are not compelling them to buy an annuity, so that option will still be there. A fall-back is written into the rules that says that before somebody defaults into buying an annuity from their pension provider, they must, under regulations, have had the chance to shop around and to be given advice. That looks like a sensible provision that should perhaps be kept. Repealing it strikes me as being a little too optimistic about how well this market might work in the early years.
	Moving on to the general principle of the Bill, these changes reopen the debate about how we use the tax system to encourage pensions. There is a huge annual bill for allowing people to put untaxed income into their pension scheme. According to the latest figure I have seen, the net cost is about £22.8 billion in income tax, plus £15 billion in national insurance, so we are talking about £38 billion of taxpayers’ money being used to incentivise pensions saving each year. Okay, some of that money comes back when pensions start to be drawn, but it is still a large amount. The more flexible we make savings arrangements, so that people can choose when they draw down their pension and can do so 10 years before they retire, the weaker we make the justification for saying, “We should do this pre-tax”, because we are distorting the savings market.
	I suspect that the only reason most people would choose to save into a defined contribution pension, locking their money away at the whim of some unscrupulous pension provider who charges them for things they do not understand and finally getting their money back 30 years later, is that they get this huge tax advantage. If we are going to start enabling people to have large amounts of that money, tax-free, a long time before they retire, does that change the equation? Perhaps we should be thinking about these things. Is this the right way to distort the pensions market? Should we not equally incentivise people to put money into an individual savings account every year and have a bit more control over it and a bit more visibility? Is that better protection for them?
	We desperately want people to save money for their retirement, and we want it locked away so that they cannot spend it each year, and I suspect that using the tax system to achieve that is still very much the right answer. However, we probably need to think again about how much we are spending on higher-rate tax relief on pension contributions in order to make the system more flexible.

Mike Freer: I am blessed with articulate constituents who understand pensions issues. One of the issues raised with me is that we are allowing people to take out the tax benefit that they have been given for free by the Government. Does my hon. Friend think it is worth looking at putting the tax relief into something like the protected rights pot that used to, or still may, be in place for personal pensions, so that the tax relief element could not be withdrawn, and only the contributions could be withdrawn?

Nigel Mills: That is an interesting idea. I am not sure how we would hypothecate part of a pension pot, and do I really care whether the 25% I am taking out is the tax bit, the bit I paid in, or the bit my employer paid in? If my hon. Friend means that I could not take out the 25% of tax benefits—I could take out only 18% of the pension pot, rather than 25% tax-free in a lump sum—I can see a certain logic to that. In effect, it would just reduce the tax-free lump sum that people can have.
	The flipside of rethinking how much tax relief we allow for pension contributions is that it is probably unfair not to give people full tax relief on the way in and then still subject them to higher-rate or top-rate tax
	when they start drawing their pension. That is an interesting double charge for the Chancellor. If people do not get relief on the higher rate, should they have to pay tax at a higher rate when they draw the pension contribution back out? Frankly, why would somebody who was in that situation pay that amount each year? They would be far better off using the cash—probably to drive up property prices.
	At some point after these changes, there will need to be a debate about how we are using the tax system to incentivise pensions. Is that still the right thing to do? Is it worth the cost incurred? Is it encouraging the right behaviours? Is the tax relief really getting more people to save for pensions? Is there evidence of that, and should we continue with it? I suspect that the answer will clearly be yes—we should. However, we are making such radical changes to the pensions landscape that once we have got through this flurry of activity it is worth taking a step back to look at the situation and ask whether we are really in the right place, in terms of how we encourage people to save for their retirement. Are pensions uniquely the best thing for everybody, or could people take up other options that might encourage them to save even more, because they had more control over their funds during their lifetime?
	This Bill is absolutely the right thing to do. There are clearly issues to do with making the system work and ensuring that people who need to make choices are not disadvantaged by making the wrong ones. We are moving from a situation where people have, in effect, been forced by the law into choosing something that, sadly, was often wrong for them, towards a situation in which they can choose what they think is right for them. We need them to do that on an informed and fair basis; they must not be ripped off by the next round of mis-selling. I fear that somewhere in these freedoms there is the possibility that that will happen in the next decade, but there are things we can do to try to mitigate that.

Ian Swales: I should start by declaring an interest: I am well over 55 and have a pension pot that is subject to these provisions. I very much welcome the Bill because its measures are undoubtedly needed. I praise my right hon. Friend the Member for Thornbury and Yate (Steve Webb), who has been campaigning on these issues since 1999 and has done a terrific job in reforming pensions in his years as Pensions Minister.
	The Bill is a revolution in terms of freedom. I am glad that defined-benefit schemes are excluded, because they were the source of much of the mis-selling that took place during the scandals that occurred, with people who had very secure local authority or teachers’ pensions, for example, being encouraged by unscrupulous advisers to cash them in and take out risky products. We have to try to avoid that.
	People arrive at the time when they want to take their pension in many different circumstances. They may want to spend their money at different rates depending on their view of how they want to spend their retirement. They may have health issues that determine how they spend their money. They may make various different choices. Even though I was brought up as a Presbyterian
	by my Scottish parents, I have nothing against holidays, which are a perfectly good choice when one initially retires.
	I know from talking to constituents that one of the main things people do these days is make a capital transfer to their children, particularly to buy a property. I can well understand why people whose income is okay might want to do so, and given that the new rules on inheritance are much less penal in cases of early death, funds that they have saved up will still be available to their family.
	However—there are quite a few howevers about this Bill—annuities have a deservedly bad name in terms of value, mainly because low gilt rates mean that annuity providers can only offer low rates. Annuities do have a purpose. They are a pool, which is one of the things that I find constituents have difficulty in understanding. Perhaps even the hon. Member for Amber Valley (Nigel Mills) has difficulty in understanding that, given what he said; I know he does not, because he is an expert in this area. When people die soon after taking out an annuity, the insurance company does not get the money; the person who gets the money is someone who is lucky enough to live to be 100. That is what pooled annuities are all about.
	By demonising annuities, we have caused people to forget that they do not know how long they are going to live. On average these days, somebody aged 65 will live until they are 83, but a lot live longer and quite a lot live less than that. The whole point about annuities is that they are a pool, and people bet against how long they are going to live. I think that the industry will come up with annuity-type products to meet the desire of many people for a secure income for as long as they live.
	In financial services, it is always worth asking what is the worse that could happen, because it usually does happen. That is why we need to think about some of the unintended consequences, difficulties or gaps. Several speakers have mentioned the world of guidance. I was disturbed to hear the hon. Member for Reigate (Crispin Blunt), who is not in his place, say:
	“We will not get it right first time.”
	Let us remember that guidance in this area will be given only once for each individual. They cannot keep going back for more guidance: it happens once. If we do not get it right first time and the cohort of people in the first year do not get good advice, they will suffer for the rest of their lives. From our point of view, it might take a while to get the guidance right, but for the people getting the advice it must be right when they get it. The whole area of standards and regulation in relation to the Bill would bear more examination.
	Advice needs to be impartial and transparent, and it should be based on straightforward products, but I worry about the level of knowledge of the people receiving advice. A few weeks ago, a constituent came to see me who had taken out a finance deal for some solar panels. It turned out that the combination of the savings on the solar panels and the finance deal meant that she had an overall penalty in her budget. The savings on the panels in no way paid for the cost of the finance, although she had been told that it would.

Barbara Keeley: The hon. Member for Amber Valley (Nigel Mills) spoke about someone who left work and needed their care costs to be covered at a certain point.
	In my view, that is another thing for which constituents do not plan. I have lost count of the number of my constituents who did not even know that they had to pay for social care and did not understand the thresholds. I am concerned that a lot of people will be tripped up if they draw down money and increase their savings, because they will suddenly find that they fall within the threshold at which they have to pay for social care. People commonly do not understand that, and it will not be covered by the guidance.

Ian Swales: That is a very good point. The guidance needs to be much more in the round on what may happen to people after retirement, but I suspect that that will not be mentioned in the guidance unless we can do something about it.
	To go back to my example about the lady with the solar panels, I went through the documents with her, and they very clearly showed the numbers. There was no doubt: she had not been scammed. What she had signed up to was absolutely clear, and her signature was on all the documents. She said, “Oh, I just didn’t realise. I’ve an A-level in maths, so I should have realised.” What worries me is that we do not have to speak to many constituents before we realise that levels of knowledge about pensions are extremely low. As the hon. Member for Worsley and Eccles South (Barbara Keeley) has said, other consequential issues of getting older are sometimes even less clearly understood.
	I am worried about the guidance, and I think that there will be concerns about whether it is appropriate and whether people have the financial awareness necessary to understand it. That goes back to the need to make people more financially literate from school onwards, but we will not solve that problem overnight. The industry is talking about having a second line of defence, and it needs to be listened to. It is a clear case of “They would say that, wouldn’t they?”—it is designed to get people to move towards the type of products that the industry is offering—but such a second line of defence might serve to protect people from themselves, as it were.
	We need to watch out for scams. I listened carefully when the hon. Member for North Down (Lady Hermon) mentioned criminality in relation to people losing their pension savings. Pension release companies already impose extremely high charges for unlocking pension schemes and doing very little work. I am prepared to take an intervention from her if she so wishes, but I am a bit concerned about how to define criminality. People may make a bad decision, but that is not necessarily criminal. I agree with her, but I wonder what kind of products or service she means when she talks about criminalising those who end up losing their pension pots.

Lady Hermon: It is awfully nice of the hon. Gentleman and so kind of him to invite me to intervene. I absolutely do not want to criminalise people who draw down their pension. I am a huge fan of Radio 4, and I listen very carefully to its finance programmes. As has already been mentioned, we and many people—certainly constituents in my patch—are worried about unscrupulous so-called pension advisers who set themselves up so that people can go on to the internet, press a button and commit their life savings to them. I do not want to
	criminalise the person involved; I want to put into the Bill a deterrent against unscrupulous tax or pension advisers.

Ian Swales: I thank the hon. Lady for her clarification. I am sure that the Exchequer Secretary would be interested to hear more about how she defines “unscrupulous”. I agree with her, but there is more to do to be clear what that means or about conduct that the Financial Conduct Authority would regard as unscrupulous.
	All this liberalisation of pensions, as the hon. Member for Amber Valley mentioned, makes pension savings more like other kinds of savings. We are also providing a big tax advantage. Removing restrictions on when pensions are taken and removing some of the tax charges and restrictions on death means that we are moving closer and closer to a simple tax-free savings market. Such a market is especially attractive for people who are very close to retirement. I have done some sums, and if one is about to take one’s pension pot, there is quite an incentive—because of the tax-free 25%—to throw in the maximum possible amount of money in the months before retirement. Somebody paying tax at the basic rate who puts a lot into their pension pot in March and starts their pension in April or May would make a 6% return on their money simply by putting it in and taking it back out again. A higher rate taxpayer would make a 16% return on their money simply by putting a lump sum into their pension pot immediately before they retire and then drawing it out again. There will therefore be clear consequences of the flexibility that we are creating. People will be more inclined to put their money in if they know that they will be able to get it out quickly. There are clear benefits to getting the tax-free amount very quickly.
	We have heard about the possible later costs to the state in respect of care and so on. By definition, if people take more out of their pension pots earlier, more people will need state assistance later in life with health or care costs. I know that the Minister is aware of that issue, but I do not know whether the possible costs have been calculated or estimated.
	I am more confident than most that the responsible part of the industry will come up with new products and innovations. As I said to somebody from Just Retirement last week, what people need is plain language. Even the word “annuity” is not plain language. People want a secure income in retirement. The vast majority of people who retire do not want to buy a sports car, but to have a certain income throughout their retirement. The more the industry wraps things up in mumbo-jumbo that people do not understand, the more suspicious people are of its motivations.
	We are already seeing warning signs. For example, Fidelity is saying, “All this flexibility means complexity, which means higher costs, because we are not set up to run bank accounts.” I am concerned that the industry will see the changes as a new way to levy high charges. It will say that the very flexibility that the Government want to see is expensive to provide. I hope that we see the right level of competition in the market and that people come in who do not levy those high charges.
	We have seen a huge fall in the number of annuities that have been taken out recently. Just Retirement has seen a 50% fall in demand for annuities. I suspect that
	that is party due to uncertainty. People want to be clear what the new rules are before making a decision. Demand may pick up again, particularly if there are new products. However, there is no doubt that fewer people will take out annuity-type products.

Cathy Jamieson: I am listening carefully to what the hon. Gentleman is saying. Does he agree that there are concerns for people who have relatively small pots, because companies might feel that it is not in their financial interest to offer them products? How can we ensure that there is equality?

Ian Swales: The shadow Minister makes a good point. If we create a spectrum of products that is genuinely complex, the charges might be inappropriate even for those with medium-sized pots because of the flexibility that is offered. We need to hear more from the industry about that.
	Finally, on timing, I know from personal experience that when the date that one has defined as a potential pension date is approaching, the industry offers what it calls warm-up packages. I have had my first warm-up package for next year. The industry is not waiting until April next year. It has to get on with this right now. If there is any uncertainty in the minds of Ministers, they had better get moving pretty quickly, because the industry has to get all its systems, documentation, regulations and new products in place so that it can offer them to the cohort that is approaching retirement in just a few months’ time—from April onwards. The ABI is already concerned that it is getting towards the eleventh hour, when clarity on all this will be needed.
	Despite all the reservations that I have expressed, I very much support the Bill and commend it to the House. I am sure that when it emerges in its finished form, it will be an excellent piece of work.

Shabana Mahmood: It is a pleasure to close this debate for the Opposition.
	There have been only a few Back-Bench speeches, but they have all been insightful and valuable. The hon. Member for Reigate (Crispin Blunt) was spot on when he spoke about a deficit of consumer awareness and said that the FCA will have to be alert to the needs of all consumers across the spectrum.
	My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) sits on the Pension Schemes Public Bill Committee. He spoke at length about the evidence that was given by Mr Greenwood. I am not on that Committee, but I found the points he made about that evidence telling and concerning. I hope that the Exchequer Secretary will respond to those issues.
	In particular, my hon. Friend highlighted the potential opportunities for tax avoidance. I am sure that Members across the House will want to interrogate the measures in this Bill and the Pension Schemes Bill in detail to ensure that revenues to the Exchequer are protected. I hope that the Exchequer Secretary will say more about the Government’s view of the number of employers—my hon. Friend gave the figure of 192 from the evidence that was given to the Pension Schemes Public Bill
	Committee—who are looking at mechanisms to exploit the changes to the pension taxation rules as a ruse to reduce employer’s national insurance contributions.
	The hon. Member for Amber Valley (Nigel Mills) was right to say that we want to avoid the two extremes that he highlighted. He was also right to speak about the importance of getting the guidance to work properly. He raised an important point in asking what will be the default setting for people who have been auto-enrolled and have a pot of money, but who simply do not engage with the process. It is important to get into the nitty-gritty of what will happen in practice in such scenarios. Again, I hope that the Exchequer Secretary will respond to those issues.
	The hon. Member for Redcar (Ian Swales) was right to begin his speech by reminding us of previous scandals and the lengths to which unscrupulous individuals have gone, and he concentrated our minds on ensuring that such issues do not arise again. He was right to say that we must get the guidance right first time because it only happens once for each person. That should concentrate the minds of all Members on ensuring that we get the guidance absolutely right.
	The shadow Financial Secretary, my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), made it clear that we support the principle of increased flexibility for people in retirement and the reform of the pensions market so that people get a better deal. We are therefore not against the principle that people should be allowed to exercise choice. However, this is a big Bill that contains big changes that will affect tens of thousands of people, if not more, immediately. Just this week, research published by Ipsos MORI suggested that 200,000 people may choose to take their entire pension in one go next April, creating a potential tax windfall for the Treasury of £1.6 billion.
	It is fair to say that some issues that are debated in this place appear to be removed from the outside world. This is not one of those occasions, as the figures show. We therefore have a bigger immediate responsibility on this occasion to get the Bill absolutely right. Although I reiterate our support for increased flexibility, I do so with a word of caution, because that flexibility will be exercised by people who have a deeply variable understanding of the marketplace in which they are operating.
	The Ipsos MORI poll also showed that only a third of those planning to take out their pension pot were aware of the tax that they would pay should they take out their entire sum in one go. The 2012 Department for Work and Pensions attitude to pensions survey noted that half the respondents had no prior knowledge of annuities before being asked the questions in the survey. The Financial Services Consumer Panel also published a report, in December 2013, which said that the
	“market does not work well for the majority of consumers.”
	One of its key findings was that consumers were poorly placed to drive effective competition among providers and distributers of annuities. It said:
	“There are many barriers inhibiting consumers’ full engagement when they decide to annuitise: low financial capability; fear of product complexity and of making an irreversible, high-cost mistake; general distrust of professional advisers, and inability to find appropriate advice at acceptable cost.”
	The Bill will operate in that context, not in some fantasy world in which the majority of the electorate has an
	in-depth understanding of the pension marketplace. That is not to say that a greater understanding cannot be fostered, because, as we know, the same DWP survey shows an increase in the awareness of annuities between 2012 and the previous survey in 2009. However, in some cases we start from a very low base.
	We also have a social responsibility to get this right. This policy needs to be fair. Successive Governments have invested in pension relief to support people in retirement. As the Government have said, it is an annual investment of £22.8 billion, and it is important that we ensure that the taxpayer gets good value for money for that. It is money that belongs to all taxpayers, even those for whom a private pension or a workplace pension are out of reach. We must ensure that the relief given generates the consequences intended, the main one of which is income in retirement, not income for other things.

Ian Swales: The shadow Minister raises a good point about the relief, but pensions are taxable when they are paid out, so it is important not to suggest that £22.8 billion is the net cost of the pension system. The money may be taxed at a different rate, but it will be taxed when it comes out.

Shabana Mahmood: I was simply making the point that the reliefs are there for a reason and we have to ensure that they work for the benefit of all taxpayers, but the hon. Gentleman is right.
	There is also the hard-nosed political test of making sure it is not the Government who are picking up the pieces if this all goes wrong. I reiterate our support for increased flexibility, but we have to acknowledge that this particular system has built-in risks. Under the new arrangements, a pension pot of £100,000 could be used to secure an annuity of about £6,500 that, added to the state pension, would yield the recipient a little over the UK’s national pension income, according to HMRC’s 2013 figures. Of course, it could be drawn out in one lump sum to buy the proverbial Lamborghini—it would probably have to be a second-hand one because they cost closer to £250,000 than £100,000. But what would happen then? If the recipient in question has not made the necessary contributions to receive the single-tier pension, when it comes in, will their pension be topped up to the accepted minimum level? That is not yet clear. This potentially leaves us in a dubious ethical position as well as a financially precarious one.
	Our responsibilities to get this right are clear. It will affect many people, and we have both a social and financial responsibility to make sure that the changes work properly. Given that those changes are so significant, I would have expected extensive consultation by the Government before the announcements were made, but unfortunately that was not the case. As my hon. Friend the Member for Kilmarnock and Loudoun said, despite beginning well, with work on the single-tier pension and auto-enrolment—policies based on evidence, consultation and consensus, which built on the work of the previous Government—these reforms have been rushed and somewhat erratic. The Government did not consult before making the announcements, either with consumers or with the industry. Nor have the Govt allowed sufficient time for the changes to be executed.
	Despite the enormity of the change and the change of emphasis from the importance of accumulation to the ease of access, we are left in a situation in which outside experts are lamenting the lack of time to get this right. Regarding the need for proper guidance for consumers, the ABI’s director general said:
	“The guidance guarantee is a crucial part of the Government’s pension reform, and the industry fully supports the Government’s intention to provide free, impartial guidance to savers on their options as from next April. But time is not on our side. No one should under-estimate the work that needs to be done to make this a reality, which is why the Government have some urgent decisions to make.”
	We have to ask why the Government are in such a hurry to push through reforms when some of the essential underpinning to make them work seems to be missing. I have to say I am glad that I will not be in the first tranche of retirees to experience these reforms, unlike the hon. Member for Redcar.
	That brings us to the issue of good guidance, or lack thereof. We know that changes of this magnitude will bring a significant number of new products to the market. That is not in itself a bad thing, as some products will be better than others; that is the nature of the marketplace. It is also well recognised that on the whole there is a requirement to ensure that consumers are far better informed—I have already outlined the evidence provided by the Financial Services Consumer Panel. However, in addition to extensive consultation, we would expect the Government to have done significant work on the guidance mechanisms before making the announcement in the Budget, but unfortunately that was not the case. From the start, a significant level of confusion has surrounded what the Government meant when they said that reforms would be accompanied by “advice”. It later transpired that it was not “advice” that would be provided, but rather “guidance”. That is an important distinction, as we have heard, since guidance carries none of the same legal protections as advice, which is regulated and therefore considerably more expensive to provide.
	When the Government have been pushed on the matter, I am afraid their language has been far from reassuring, to the extent that the measure looks like a mere add-on to the whole pension reform programme. In my opinion, that suggests a slightly cavalier attitude, which may prove to be short-sighted. The Financial Conduct Authority’s consultation, “Retirement reforms and the Guidance Guarantee”, stated that,
	“to be effective the guidance will need to be tailored, providing consumers with sufficient personalised information, so that they can understand their options and make confident, informed decisions about their retirement choices.”
	We appear to be getting something far less useful. In evidence to the Work and Pensions Committee in April, the Pensions Minister suggested that guidance will be more general in nature:
	“The thing we are talking about is free to the customer. There is no charge for it. It is what we call ‘guidance’, rather than independent financial advice, so it is not formal, detailed or product-specific; you can go and buy that if you want to, but this is familiarising people with the options they have, and some of the concepts, even. Most people do not know what an annuity is.”
	There is much that we do not know. We do not know the detail of what will be funded, the level of levy used
	to pay for it, what the guidance will be expected to cover, or what it is expected to achieve. Even at the end of the debate, we appear to have more questions than answers—questions that go to the heart of issues that will be central to ensuring that the programme works. We will be picking up on those issues of detail, fairness and guidance when the Bill reaches Committee.

Michael Fabricant: On a point of order, Madam Deputy Speaker. This is nothing to do with the debate—I apologise to my hon. Friend the Minister for interrupting it—but I was due to attend an event this evening at which I was, I believe, to receive an award. I understand at very short notice that I have been banned, along with a number of national journalists. The person who banned me was Mr Speaker, and I was wondering whether that is normal behaviour for a Speaker.

Eleanor Laing: The hon. Gentleman has made his point most eloquently and the House has heard it. I confess to having no knowledge whatsoever of the matter to which he refers, and while I am certain that Mr Speaker would never wish any discourtesy to any Member of this House, the hon. Gentleman will understand that the matter he raises is not something on which the Chair can take any action at this moment.

Priti Patel: This has been a wide-ranging and constructive debate; it has been engaged and informed, and I thank everybody who has participated. Before I address some of the specific points raised, I wish to reiterate the main purpose of the Bill.
	The Bill is intended to put in place the most radical reform to the way people take their pensions for nearly a century. It is a fundamental principle for this Government that those who have worked hard and saved all their lives should be free when they reach retirement to choose how they spend those savings. That is because we believe in personal responsibility, and that the money someone has earned is their money.
	The Bill will remove the limits on withdrawals from drawdown and the restrictions on the shape of annuities, and it will create new and more flexible ways for someone to put the money in their pension pot to good use and provide for their future as they wish. As a result of the reforms, people will rightly have the freedom to choose how to spend their savings. That, in turn, will incentivise the pension industry to provide real choice through a range of innovative new products.
	I would like to address points raised by the Opposition; first, the myth that the Government have not consulted. The Government have consulted extensively on implementation and legislation, and we have received wide support from consumer groups and the industry. I note that the hon. Member for Birmingham, Ladywood (Shabana Mahmood) quoted the chief executive of the ABI. He has also said that the ABI
	“welcomed the reforms as good for those who were faced with the double challenges of increased longevity and very low interest rates when they came to make retirement decisions. The industry is behind these reforms. We want them to be a success and our members are working flat out to get everything ready for April 2015.”
	The Government are putting in place comprehensive guidance. There has been discussion on guidance—I will come on to it in more detail—and I want to make it abundantly clear that we have brought forward an amendment to the Pension Scheme Bill to achieve just that.
	On fairness, the old system was unfair and it disadvantaged those with a moderate amount of savings. Our Government reforms will make the system more flexible and fairer for all. On cost, as the Financial Secretary has clearly stated, we set out the costings at the Budget. Since the Budget, and as a result of consultation, we have introduced further changes and the OBR-certified update will be provided at the autumn statement.
	There have been a number of positive views from the industry. It is wrong and misleading to imply that there is no support from the industry. The consultation has been extensive. There has been a 12-week consultation on the best way to implement the changes, followed by consultation on the Bill itself. It is important to move quickly, because people are making binding decisions every day with what are, frankly, limited choices in the current marketplace.

Cathy Jamieson: I am sure the Minister did not intend to suggest that I, or any other Opposition Member, said there was no support from industry. For the record, that is not what we said. We recognised that concerns had been expressed. That is different from saying there was no support.

Priti Patel: I am grateful for that clarification. There is extensive support from the industry. I pay tribute to the industry for the way it has worked with us through the consultation to bring the changes together in such a constructive and supportive way.

Crispin Blunt: On that point, two companies in my constituency, Partnership and Just Retirement, are specialist annuity providers and will be significantly affected. They contributed to the consultation and I know that the Government moved in response to that. I am grateful to the Minister and her officials for the attention they paid in the consultation process.

Priti Patel: I thank my hon. Friend for acknowledging that work and for his thoughtful contribution. He has many pension providers in his constituency. Those insights have helped to inform the debate and shape the Bill.
	The aim of guidance is to empower consumers to make informed and confident decisions on how to use their pension savings in retirement. Information alone is not enough to change consumer behaviour. The Government are committed to maximising awareness of the guidance service. Key to that will be the regulatory requirements on providers and schemes to signpost to guidance at key points when individuals are trying to access their pension pot. In its recent consultation on the changes surrounding new pension flexibilities, the FCA has been clear about requiring genuine signposting, including rules that ensure firms cannot circumvent consumers’ right to guidance. An essential part of the development of the guidance will be determining what engages consumers effectively. The Government are assessing engagement and take-up rates, and testing
	different engagement strategies informed by behavioural insight teams as part of piloting work beginning this autumn. Again, this is about getting it right. My hon. Friend the Member for Redcar (Ian Swales) made an important point about that. We are getting one bite of the cherry and we need to make sure we get it right.

Ian Swales: Can the Minister say a little more about the timing? She said that a consultation is under way; presumably its outcome will affect what the Government do. People who are due to take pensions in April will be considering their options from January and February onwards, so when will we be clearer about the nature of the guidance and the universality of provision, and when will people be told about that?

Priti Patel: Let me assure my hon. Friend that guidance will be available in good time. It is also imperative that we get the guidance right, so we are working assiduously to do exactly that.
	The scope of the high-level content of the guidance was set out in the FCA consultation that it ran in anticipation of its standard-setting role. The Treasury and its delivery partners, the Pensions Advisory Service and Citizens Advice, are working up the operational details and the context of the guidance while adhering to the FCA standards.
	I will come to some of the other points raised by colleagues, but I would like first to touch on the Ipsos MORI poll that has been referred to. The poll also found that 88% of people would not draw down their entire fund. People said that rather than just spend their funds on a range of things, they would use them for good financial planning. That is exactly what these reforms are all about: trusting people with their money.

David Mowat: The Minister talked about guidance a few moments ago. In the event that guidance is found to be inadequate or not to have been offered properly, would that potentially void any transaction made subsequently?

Priti Patel: The guidance that is provided will not make specific recommendations. Information will be provided to individuals not to make specific decisions, but to signpost and guide them through the areas I have touched on.

David Mowat: I thank the Minister for that answer, but if a supplier sold a product without offering any guidance and without checking whether that had happened—notwithstanding the question of its not being specific—would that be a problem and could it void the transaction?

Priti Patel: The FCA will be clear in setting out standards. However, I will come to that point shortly, because we have also discussed the consequences of mis-selling and fraud.
	I would like to reply to a number of points made in the debate. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about the tax revenue implications of the annual allowance and highlighted the evidence given before the Pension Schemes Bill Committee on 23 October. As my hon. Friend the Financial Secretary outlined earlier, the assumptions
	made in that evidence generated a huge overestimation of the likely cost of the reforms to the Exchequer. The Government believe that the introduction of a £10,000 annual allowance is the appropriate approach to allow people the flexibility to withdraw or contribute to their pensions as they choose from age 55, while ensuring that individuals do not use the new flexibilities to avoid paying tax on current earnings. It will also avoid unnecessary complexity for both consumers and pension providers when the new system comes into place in April 2015.
	I would like briefly to touch on the two other contributions. We heard from my hon. Friend the Member for Amber Valley (Nigel Mills), who I understand celebrated his 40th birthday yesterday. He seems far too young to be contributing to pensions debates, although I know he has specialist knowledge in this area. He made a thoughtful contribution and raised a number of points. He mentioned the open market option. To be clear, the open market option will continue to be highlighted in the information that pension schemes are required to provide to their members at retirement. We have simply removed the requirement under the tax rules for the member to have chosen the annuity provider in order for the annuity to be an authorised payment. It is not appropriate for the member to be charged tax because they have been deprived of the opportunity to select an annuity provider.
	Other points were raised about a proposed criminal offence for mis-selling. FCA rules are clear and require the responsible sale of products to consumers in a way that is clear, fair and not misleading. The FCA also has powers to take action against firms engaged in authorised business, and is able to prosecute a number of criminal offences. I hope that clarification reassures the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who was very explicit in her points. We are very clear on that. It goes without saying that the FCA and the Pensions Regulator will monitor this whole area to ensure that fraudsters do not use the reforms to take advantage of vulnerable people.
	My hon. Friend the Member for Redcar touched on annuities, as did my hon. Friend the Member for Amber Valley. The Government are clear that annuities will remain the right choice for many at some point during their retirement. We believe that many people will still value the security of an annuity, but that is something that individuals—not the state—should decide. As all contributions have made clear, this is about individual choice and opening up the marketplace. As retirement changes, many people may, for example, opt to buy an annuity later in life, allowing them to benefit from higher annuity rates. It is for individuals to buy products that are best suited to their particular circumstances.
	In response to my hon. Friend the Member for Redcar—who was firm on the need to get on with this—we understand the scale of the challenge. That is why we have appointed an implementation team in the Treasury for the guidance guarantee, and we are working closely with the industry to ensure that it is ready for April 2015.
	Finally, the risk of people spending all their money at once was briefly mentioned. I would like to reiterate that the Government believe that people who have worked hard all their lives should have the freedom to decide how to use their savings and, importantly, should
	be trusted to do so. The Government do not dictate how people should spend their money generally, so why should it be any different when it comes to their pension savings?
	I am grateful to have had the opportunity to explain the issues that have arisen today. We have had a good debate and look forward to more in Committee. A number of important points have been raised. I think all hon. Members have sensed that the main issue is the principle of empowerment and allowing individuals to make choices that are right for them, especially when they come to assess their pensions. The Bill is about choice and it will make that choice possible. I commend it to the House.
	Question put and agreed to.
	Bill accordingly read a Second time.

TAXATION OF PENSIONS BILL (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),
	That the following provisions shall apply to the Taxation of Pensions Bill:
	Committal
	(1) The Bill shall be committed to a Public Bill Committee.
	Proceedings in Public Bill Committee
	(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 20 November 2014.
	(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
	Consideration and Third Reading
	(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
	Other proceedings
	(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mr Gauke.)

TAXATION OF PENSIONS BILL (WAYS AND MEANS)

Resolved,
	That, for the purposes of any Act resulting from the Taxation of Pensions Bill, it is expedient to authorise the making of provision in connection with the taxation of pensions.—(Gavin Barwell.)

PETITION
	 — 
	NHS health services in Guisborough, Skelton, Brotton and Park End (Middlesbrough)

Tom Blenkinsop: I wish to present a petition.
	The petition states:
	The Petition of residents of the UK,
	Declares that the Petitioners believe in fighting to defend the NHS, believe in fighting to defend the NHS services in East Cleveland and Park End, Middlesbrough, and oppose cuts inflicted by the Conservative-led government’s Health and Social Care Act 2012; further that the Petitioners believe that proposals to scrap GP services at Skelton Medical Centre should be abandoned; further that proposals to scrap GP services at Park End Medical Centre should also be abandoned; further that the Petitioners believe that South Tees clinical commissioning group’s plans to close East Cleveland Hospital’s and Guisborough Hospital’s minor injuries units is short-sighted given the £30 million deficit of South Tees Hospitals NHS Foundation Trust; and further that the Petitioners condemn South Tees clinical commissioning group’s decision to close Skelton’s NHS walk-in centre.
	The Petitioners therefore request that the House of Commons urges the Government to encourage NHS England and South Tees clinical commissioning group to reverse plans to close Park End Medical Centre, Skelton Medical Centre, its NHS walk-in centre and East Cleveland and Guisborough Hospital’s minor injury units.
	And the Petitioners remain, etc.
	[P001357]

CALLUM WARK (SENTENCING OF FOREIGN DRIVERS)

Motion made, and Question proposed, That this House do now adjourn.—(Gavin Barwell.)

Alec Shelbrooke: Members on both sides of the House will have experienced incredibly difficult cases in their constituency advice surgeries, but for me, few experiences have been as difficult as meeting my constituents Joanne and Robert Wark from Swillington in May this year.
	Joanne and Robert came to talk to me about their son Callum. They described 3 March 1994, the day Callum was born, as the proudest day of their lives; he was a gift that completed their world. People say that a baby’s character shines a light on the adult whom the baby will become, and that was certainly true of Callum. This happy, well- behaved toddler grew up to be a kind, gentle person, and a thoughtful young man who loved his parents and grandparents dearly. As a child, Callum would regularly visit his gran and granddad, and was always eager to help with jobs around their house and garden. Joanne and Robert did a first-rate job in bringing up a child of whom any parent would be proud, a child of compassion and profound generosity.
	Callum’s school reports talk of a child who did not always find school work easy, but always worked hard for every educational achievement. The phrase “a pleasure to teach” appeared regularly in his school reports. His family told me of a school sports day when a five-year-old Callum, already sports mad, stood on the starting line of a race that he was the favourite to win. After the klaxon had fired and halfway through the race, he turned around to see his friend—a friend with learning difficulties—standing rigid on the starting line. Callum turned around, ran back, and helped his friend to the finishing line. He lost that race, but he won many more after that.
	Callum attended Brigshaw high school, an outstanding comprehensive school near Allerton Bywater in my constituency. On reaching the age of 16, he secured a part-time job at the well-known Strikes garden centre on Swillington Common, and decided that he wanted to go on to do an apprenticeship—to learn a skill for life, and then begin a career. He later secured a job locally, at the Wincanton warehouse. That job was a stop-gap, and while doing it he applied for many apprenticeships. He did not do too well in maths at school, but he needed it for the apprenticeships for which he was applying, so he took it upon himself to enrol on additional maths courses, which he attended on his days off.
	I am sure the House will agree that Callum’s work ethic and self-motivation were qualities that we would wish to see in all young adults in Britain today. Just as I had to, Callum worked hard and saved up so that he could afford and insure his first car. He cherished that new-found freedom, as new drivers do, and his new car became his pride and joy. When I met Joanne and Robert for the first time, I noted that Callum’s placid, permanently selfless nature seemed quite uncommon among teenagers today. They were quick to assure me
	that Callum had “the usual teenage tantrums”, but they were equally quick to add that “he never caused us or anyone else any trouble.”
	At 2.47 in the afternoon of 1 March this year, two days before his 20th birthday, Callum was killed when his Renault Clio was hit by a heavy goods vehicle on the A162 between Ledsham and Fairburn, just outside my constituency. The driver of that heavy goods vehicle, a Bulgarian national called Stoyan Andonov Stoyanov, was found to be under the influence of alcohol. He was jailed for just seven years, but is likely to serve only half that sentence, and was banned from driving in the UK for 10 years. Let me put that in context. In 2024, when Callum should have been celebrating his 30th birthday—perhaps with a family of his own, and a good career—his killer could be driving on UK roads again, enjoying all the freedoms of life that his reckless actions took away from Callum.
	At the end of my initial meeting with Callum’s parents in Garforth library last May, Joanne turned to me and, with little hope left in her voice, thanked me—not for my offer of support, but for doing something that no one else had done. No one else had asked to hear about Callum the individual: the son, the grandson, the much-loved friend, the innocent teenager enthusiastic about the excitements of the life that he had yet to experience. Callum was not merely a number, nor is he now merely a road traffic fatality statistic. Those who knew him had little doubt that he would one day go on to great things, and today we can create a legacy in his memory. We can give his parents justice, and give a meaning to his untimely death by making an amendment to the law in the name of Callum Wark.
	Stoyan Andonov Stoyanov was found to be more than three times over the legal drink-drive limit and admitted to drinking a full bottle of spirits in the 24 hours before the crash. Despite this, he knowingly placed himself behind the wheel of his heavy goods vehicle. There may have been no malice aforethought in his actions, but my constituents and hundreds of campaigners who have signed a petition believe that such actions certainly constitute unlawful act manslaughter. Those calling for stricter sentencing for drink-drivers who kill argue that the deterrent is not great enough. According to the west Yorkshire-based road safety charity, Brake, evidence suggests that the current system to tackle repeat drink-driving is not working: one in eight drink-drivers does it repeatedly, and as many as three in 10 high-risk offenders reoffend. Repeat offending is one of the major drink-driving issues, yet the penalties are the same no matter how many times an individual reoffends.
	In 2004, the maximum penalty for causing death by dangerous driving when under the influence of alcohol or drugs was increased to 14 years. However, criminal justice statistics recently published by Brake show that fewer than three in five drink-drivers who kill receive a sentence of more than five years in prison. It is my understanding that a Sentencing Council review is soon to take place and therefore, on behalf of my constituents and all victims of death by drink-driving, I call on the Ministry of Justice to review charges under the Road Traffic Act 1991 and introduce a strict minimum sentence—an amendment to the law, in the name of
	Callum Wark—to ensure that those guilty of causing death while under the influence of alcohol or drugs serve a stricter minimum sentence in custody.
	I dare say that nobody can begin to understand the emotional torment and heartbreak of the families of victims of road traffic fatalities. There is little one can say to offer comfort in those circumstances, but for my constituents, the difficulty of that experience was only made worse by the insensitivity of the Crown Prosecution Service, which, more than anything else, affirmed to my constituents that in the eyes of the CPS—and certainly of their CPS solicitor, Sarah Nelson—Callum was just another number, a statistic. Charities such as Brake offer fantastic support services to the victims of crime, and I know Members across the House will want to support their 17th annual road safety week on 17 November. However, although charities perform a vital role in bereavement support, from the experiences of my constituents, the same cannot be said for the CPS. This may not be the case across the board, and Members might know of cases where their constituents received excellent support from CPS lawyers, but I can only speak from the information relayed to me by my constituents, which showed that support for and understanding of victims’ families is desperately deficient. Perhaps the CPS might therefore look at additional training for those acting on behalf of those in bereavement.
	Justice is often sought as a comfort. It is sought after the most horrific of events, but it rarely delivers the sense of closure that those who seek it desire. Justice is not about compensation; real justice is knowing that the killer of one’s child receives a custodial sentence befitting their crime. More than that, justice should be about triggering change: it should be a deterrent to prevent these terrible incidents from happening to another innocent victim.
	Callum’s killer was a Bulgarian national, a European citizen. In recent months, there has been much discussion in this House and across my constituency of the advantages and disadvantages of the European Union. For now, at least, Britain is a member of that Union, and my constituents would expect the UK to use its position within it to bring about new measures to protect British citizens in the UK and in Europe. At present, there is no mutual recognition of driving disqualifications between EU member states, other than that between the UK and Ireland. In short, despite a 10-year ban from driving on UK roads, in three years’ time Mr Stoyanov could return to Bulgaria and resume driving anywhere within the European economic area. With 1.8 million Britons living and working in Europe, he will remain a threat to British citizens abroad, despite a 10-year driving ban in the UK.
	On the top left-hand corner of my UK driving licence is the flag of the European Union. It suggests that it is an EU-wide driving licence, in a standard format recognisable by officials in all EU member states. That symbol is meant to make it harder for drivers banned in one country to carry on driving undetected in another, yet in practice it is meaningless.
	According to the European Union’s mission statement, its second priority is
	“to promote and protect democracy and universal rights in Europe”,
	but with rights must come responsibility, and it cannot be right that a foreign national sentenced in the UK and banned from driving here can return to his native
	country—a country within the European Union—and avoid a ban imposed in UK courts. If the EU sees fits to protect universal rights in Europe, surely there must be an obligation on member states to ensure that responsibilities are universal, too. For without collective responsibilities, what is the Union but a talking shop of ideologies? On behalf of my constituents, I urge Ministers to open renegotiations with the European Commission, with a view to reaching mutual recognition of driving disqualifications across member states.
	When sentencing Stoyan Andonov Stoyanov at York Crown court earlier this year, the judge indicated that the court would apply for a deportation order on completion of a custodial sentence. My constituents expect that this order will be granted and the individual deported, yet guidelines on the deportation of foreign national offenders under section 32 of the UK Borders Act 2007 highlight a discrepancy between nationals of countries within and nationals of countries outside the European economic area. For example, under present deportation threshold criteria, non-EEA nationals sentenced to 12 months or more are considered for deportation by the UK Border Agency, whereas deportation is considered for EEA nationals only if they are sentenced to 24 months or more, unless the offence relates to drugs, sex, violence or “other serious criminal activity”.
	For the purposes of protecting British citizens at home, what is the difference between a foreign national offender from Bulgaria and, for example, a foreign national offender from a few miles over the border in Turkey? Is a criminal from Burgas any less of a criminal than one from Dereköy? Does membership of the European economic area suddenly make a member state’s criminals a lesser threat to UK citizens than those from another country? I think not. A foreign national convicted in a UK court should be subject to the same deportation threshold criteria irrespective of whether their home country is a member state of some international economic community. My constituents and I therefore urge Ministers to review deportation criteria for EEA foreign national offenders and decrease the deportation threshold to a sentence of 12 months, thereby removing the nepotism toward nationals from within the European economic area.
	I make that request because it was evident from the court case that Callum’s killer had no better understanding of British law or customs merely because he was a foreign national from within the European Union. In court, it was evident that Mr Stoyanov knew little English, either to speak or understand. He claimed to know nothing about the highway code or about UK drink-driving laws. A broader political debate arises from these issues, but this debate is not the place to air those thoughts. It is evident that Mr Stoyanov and the foreign haulage company he worked for had no knowledge of, and had made no effort to understand, the UK highway code and our drink-drive laws before he entered the UK.
	Let us be clear that the foreign haulage firm sending its heavy goods vehicles across Europe and into the United Kingdom has a duty of care to ensure that its employees understand the laws of the road in the UK. It says much about the kind of company that Mr Stoyanov worked for that the only interest it showed as regards the death of my constituent was in its repeat inquires about securing the return of its expensive heavy
	goods vehicle. Perhaps when Ministers next meet with Commissioners in the European Union, they might wish to address this issue and encourage member states to look at the effectiveness and content of assessments for the distribution of large goods vehicle licences across Europe.
	Finally, for reasons that I have discussed, my constituents believe a review of sentencing of convicted foreign drivers is desperately needed. I do not believe that stricter custodial sentencing in the UK is enough to deter others from driving while drunk. For convicted foreign drivers such as Mr Stoyanov, driving is their livelihood. Sentencing guidelines, together with the absence of restrictions preventing those subject to a deportation order from one day reapplying for entry to the UK, mean that there is no reason why Callum’s killer cannot be back driving his HGV on UK roads in 10 years’ time. The United Kingdom needs to send a strong message to foreign nationals who choose to ignore, or plead ignorance of, our drink-drive laws. My constituents therefore ask Ministers to consider, when they review sentencing guidelines, imposing a lifetime ban on driving in the UK for foreign nationals convicted of causing death while driving under the influence of alcohol or drugs.

Jim Shannon: I thank the hon. Gentleman for giving way, and I apologise for not being here at the beginning of the debate. I had a similar experience in my constituency; one of my constituents was killed by a foreign driver who had no insurance and was over the drink-drive limit. The hon. Gentleman has highlighted the need for legislative change, for punishment through the courts, and for Europe to work with the Minister here in the United Kingdom to ensure that those things happen. For those reasons, I wholly support what he says.

Alec Shelbrooke: I am most grateful for the hon. Gentleman’s support, and I know that the Minister will have heard his comments as well.
	Joanne and Robert asked me to share these words with the House today:
	“Callum was our only child; he was our world and our lives are now meaningless with no future to look forward to. We will never know if Callum would have been blessed with a family of his own, or if one day we could be a Grandma and Granddad ourselves. We will never get the chance to see Callum grow into the fine young man we know he would have been and we will never see our child achieve his goals and dreams. Next year was going to be a big year for family celebrations; Callum would have been 21 and we are celebrating our 25th wedding anniversary, but now our hearts and world have been torn apart and our lives destroyed. Yet in a few years, Callum’s killer will return to his family in Bulgaria and his life will carry on. Our lives stopped on 1 March.”
	As their Member of Parliament, nothing I can do or say in this Chamber today will restore happiness for my constituents Joanne and Robert Wark, but we can restore their faith in the criminal justice system by making Callum’s death the reason for a stricter minimum sentence for causing death while under the influence of alcohol; for better victim support and understanding of bereavement within the Crown Prosecution Service; for the mutual recognition of driving disqualifications within the European Union; for the regulation of foreign haulage companies driving in the UK; for the deportation of convicted
	foreign nationals; and for a lifetime UK driving ban for foreign nationals convicted of causing death while driving under the influence of alcohol. It is too late to change what happened to my constituent on 1 March this year, but it is not too late to bring about justice for Callum Wark and make his untimely death the motivation for change.

Andrew Selous: I thank my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) for securing this important debate and highlighting the issues surrounding the tragic death of Callum Wark. In particular, I thank him for putting on record his comments about Callum’s personality in the House of Commons today. I am sure that others will also have been particularly touched by the story of Callum turning back during a race that he probably would have won to help a friend with learning disabilities. That speaks volumes about the kind of fine young man he clearly was.
	Any death on our roads is a tragedy. Road deaths lead to unimaginable pain for the families and relatives of the victims. Such deaths are made worse when they are caused by bad driving under the influence of alcohol and could have been avoided. It is particularly troubling that Callum was only 19 and had his whole life ahead of him. Most Members will know of similar cases in their own constituencies—we have already heard from the hon. Member for Strangford (Jim Shannon) in that regard—but I hope that they will appreciate that I do not want to go into the details of their individual cases during this short debate.
	As my hon. Friend the Member for Elmet and Rothwell has said, Callum Wark was killed by a lorry driver, a Bulgarian national, who was found to be driving dangerously and well over the drink-drive limit. The lorry driver entered a guilty plea to a number of offences including causing death by dangerous driving. He was sentenced to seven years and eight months’ imprisonment on 20 March this year. He was also banned from driving for 10 years.
	My hon. Friend raised a number of issues that arise from this case and other similar cases, which I will try to deal with in my remarks. It is, of course, right that our independent courts should decide on the sentence for an offence. It is the court that has the full knowledge of the case and the offender, and it is best placed to decide on a just and appropriate sentence. It is also important to remember that we have sentencing guidelines that the courts are required to follow—unless it would be unjust to do so—which lead to greater transparency in the level of sentence likely to be imposed and increased consistency in sentencing practice. For certain offences, the Attorney-General can refer a case to the Court of Appeal on the basis that the sentence is unduly lenient—that includes cases involving causing death by dangerous driving. Anyone can make representations to the Attorney-General to consider making such a reference. There is a 28-day time limit to appeal against an unduly lenient sentence, and in this case no appeal was lodged.
	In keeping with the current law and guidelines, the driver in this case had his sentence reduced for pleading guilty to the offence at an early stage. The reduction for
	an early guilty plea is not just about saving money and court time; it is designed to ensure that victims, their families and witnesses are not required to relive dreadful events in court. I pay tribute to North Yorkshire police and others in the criminal justice system in North Yorkshire for enabling this case to be concluded with sentencing occurring less than three weeks after the incident. As the police themselves have noted, the family were spared the trauma of sitting through a protracted court hearing.
	My hon. Friend also raised concerns that the offender in this case will be released at the halfway point in his sentence. As my hon. Friend will know, release before the end of sentence is not new. Since legislation was introduced in 1967, successive Governments have maintained that approach, and the current arrangements are contained in the Criminal Justice Act 2003. In most driving cases, a standard determinate sentence will be imposed by the court, and the 2003 Act provides that such prisoners must be released automatically as soon as they have served half their sentence. The second part of a custodial sentence—the licence period—is an important part of the sentence, as it provides for the supervised transition of an offender into the community and the prospect of recall to prison for breach of the licence. If there were no licence period, offenders could be in prison for many years and then be released with no support or supervision, which would increase the risk of reoffending. If a foreign national prisoner is to be removed from the UK, it would make little sense to impose licence conditions to ensure an offender could be supervised in the community, given that they will not be released into our community. That is why after the period spent in custody for the purpose of punishment of the offence, we seek, where possible, to remove foreign national prisoners to their own country.
	The driver in this case is a foreign national and, as a convicted offender, may be subject to deportation at the end of his sentence. I am aware that the judge in this case made a recommendation that the offender be deported after serving his sentence. The Government are committed to ensuring that foreign national offenders, including those committing serious driving offences, should be removed from the UK whenever possible. In some cases, offenders may serve some of their prison sentence in their own country under a prisoner transfer agreement. In other cases, an offender may be released from custody in order that they can be removed from the UK. A foreign national prisoner can be returned to their home country up to 270 days before the halfway point of their sentence, and we need to strike a balance between ensuring that foreign nationals are removed to their own country and ensuring that they are properly punished for the offences committed in this country.
	On the wider issues of penalties, it is worth stressing that although sentencing is a matter for the courts, setting the framework that the courts work within is for Parliament. This Government want to see maximum penalties that allow the courts to respond to the full range of cases they are likely to face. The offence in this case, causing death by dangerous driving, already has a maximum penalty of 14 years’ imprisonment. The same maximum is available for causing death by careless driving while under the influence of drink or drugs. Where there is a failing in the law we have moved to remedy it. In the Legal Aid, Sentencing and Punishment
	of Offenders Act 2012 we created a new offence of causing serious injury by dangerous driving, with a five-year maximum penalty.
	More recently, in response to the awful case of Paul Stock who was killed by a disqualified driver, we have, in the Criminal Justice and Courts Bill, proposed an increased maximum penalty for those disqualified drivers who kill or cause serious injury. The current maximum sentence is two years for causing death, but will increase to 10 years when those provisions become law.

Jim Shannon: I welcome what the Minister has said about more stringent and stronger penalties. I also want to hear whether he has had any correspondence or discussions with the relevant Minister in Northern Ireland as it is a devolved matter, but I want to ensure that there is some consistency in punishment and that we are, across the whole United Kingdom, Great Britain and Northern Ireland, working towards the same goal. Will the Minister tell us whether that is happening?

Andrew Selous: I am not aware of any communication between UK Ministers and Ministers in Northern Ireland. I will ask the Minister for Policing, Criminal Justice and Victims, within whose responsibilities this issue lies, to respond directly to the hon. Gentleman.
	We recognise that it is important to respond quickly where there is a clear gap in the law or where a maximum penalty is clearly inadequate. We also need to ensure that there is a consistent and proportionate sentencing framework. That is why earlier this year we announced our intention to look, across the board, at the maximum penalties for offences involving bad driving. That review, which looks at a number of issues that many Members of this House have already raised, is currently under way and being conducted by the Ministry of Justice working with the Department for Transport. I am particularly pleased that the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), is here on the Bench with me this afternoon. The review will focus on the maximum penalties and gaps in current offences. It will soon be taking the views of victims, families of victims, road users and criminal justice professionals. I do not want to pre-empt any findings, but I hope that the review will lead to recommendations that the next Government can act on in the early stages of the next Parliament.
	In addition to the custodial sentence imposed in this case, the offender was also banned from driving for 10 years. He was also ordered to complete an extended driving test before he can regain a licence to drive in the UK. Driving disqualification and extended testing requirements are an important element of dealing with drivers who kill and are a mandatory requirement.
	The length of a driving ban is for the court to set. Guidance already makes it clear that the court should consider the time spent in custody so that the ban is not extinguished or severely diminished by the time the offender is released. Provisions in the Coroners and Justice Act 2009 reinforce that message by placing a statutory duty on courts to extend driving bans when imposing a custodial sentence. We have recently sought to make amendments to that legislation in the Criminal Justice and Courts Bill to enable those important provisions to be commenced as soon as possible.
	My hon. Friend raised concerns about the Crown Prosecution Service and its understanding of bereavement. Let me say that in any case involving a death, the CPS should be sensitive to the need to minimise the extra distress criminal proceedings are likely to cause the victim’s family and friends. The CPS guidance on that is very clear. In murder, manslaughter and fatal road traffic cases, the CPS will provide an enhanced service to family members. In such cases, the prosecutor should offer to meet the victim’s family from an early stage to explain how the case will be handled and what is expected to happen at each court hearing. The prosecutor will also explain the likely sentence should the defendant be convicted. The prosecutor will inform the victim's family that they can make a victim personal statement, and he will bring the statement to the attention of the court. If my hon. Friend has a specific concern about the handling of this case, I would be happy to pass that on to the Director of Public Prosecutions who has responsibility for the CPS.
	On the question of mutual recognition of driving bans across the EU, I should say that such a system is in place with the Republic of Ireland, but not, as my hon. Friend says, for other countries in the EU. We agree, in principle, that co-operation over disqualifications between member states, other than Ireland, is desirable. Any EU member state may wish to enter into similar arrangements to those we have with Ireland in the future. It is important to understand that a practical and effective system of mutual recognition across the EU would have to be ratified by the vast majority of member states. In the case of the existing 1998 convention, only a small number of states have ratified. I should stress that the offender in this case will not be able to drive in the UK as a result of the driving disqualification for a decade.
	My hon. Friend also raised the question of deportation of foreign national offenders. The Home Office considers for deportation all foreign national offenders who are sentenced to a period of imprisonment following a criminal conviction. For European economic area nationals, the deportation consideration process takes account of the Immigration (European Economic Area) Regulations 2006. Deportation will normally be pursued where the person is sentenced to two years’ imprisonment or more, as in this case, or 12 months’ imprisonment for a sexual, drug or violent offence. Where an EEA offender receives a shorter sentence, deportation will be pursued where it can be justified in accordance with the Immigration (European Economic Area) Regulations, taking into account the particular circumstances of the case. For non-EEA nationals, there is a duty for the Secretary of State to deport a non-EEA foreign national who is sentenced to a period of imprisonment of 12 months or more.
	My hon. Friend will know that the regulations covering cross-border haulage firms are detailed, and are governed in the UK by the Department for Transport. In short, those who operate commercial vehicles on international journeys will need a number of authorisations and permits. The authorisations will depend on the countries in which the vehicle is to travel, but include driver certificates of professional competence, community licences and a standard international operator’s licence. These requirements include regulating the amount of time a driver spends at the wheel through the EU drivers’ hours rule, as well as a requirement for an EU driver to have undertaken the certificate of professional competence.
	The principal aim here is to ensure better trained drivers across the EU, who are up to date with current legislation. As my hon. Friend will realise, this is a technical area of regulation, and I would be happy to pass on specific concerns raised by my hon. Friend to my colleagues in the Department for Transport.
	My hon. Friend also raised the question of the length of a driving ban and suggested that there should be a lifetime ban for those who cause death. The length of a driving ban is a decision for the judge in the individual case. In some cases a driving ban of a specific length provides an incentive for offenders to comply with their sentence in order that in time they can regain their licence. Where offenders are given a life ban, they may be more likely to flout that ban and drive illegally and irresponsibly. But I do recognise the point that my hon. Friend makes in regard to those who cause death, especially by dangerous drink-driving. We will be looking at the current sentencing practice and driving ban lengths as part of the driving penalties review, which will report early next year. I suggest that my hon. Friend sends a copy of this debate and a submission to that review, and that will be most welcome.
	Let me conclude by again thanking my hon. Friend for securing this short but important debate, and by offering my own condolences to the family and friends
	of Callum Wark. Mercifully, the number of people dying on our roads continues to fall, aided by better cars, better roads, more awareness of road safety, better policing and advances in emergency medicine. But I know that that will be of no consolation to the family of Callum and his many friends.
	But the criminal justice system also has an important role to play in dealing with those who continue to drive badly and put themselves and others at risk. The Government have already shown their willingness to ensure that the courts have the powers they need to deal effectively with drivers who kill or cause serious injury to other road users. We have created new offences where there was a gap in the law, and we have increased maximum penalties where the courts were frustrated by a lack of sentencing power. We are now actively reviewing the sentencing framework for the range of driving offences. We want to ensure that sentences are consistent and proportionate, but that the law also ensures that those who kill innocent people, such as Callum Wark, are punished appropriately.
	Question put and agreed to.
	House adjourned.